Exam 3: Ethics, Fraud, and Internal Control

Management fraud is regarded as more serious than employee fraud. Three special characteristics have been discussed for management fraud. What are they? Explain.

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Question 1

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Management fraud is more insidious than employee fraud because it often escapes detection until the
organization has suffered irreparable damage or loss. It usually occurs at levels above the normal internal control system. There is typically an intent to present a better picture of the business than is valid, often to deceive creditors and/or shareholders. If assets are misappropriated, the route is quite devious involving a maze of business transactions.

Output controls ensure that output is not lost, misdirected, or corrupted and that privacy is not violated. What are some output exposures or situations where output is at risk?

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Question 2

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output spooling, print programs, waste, report distribution

Input controls are intended to detect errors in transaction data after processing.

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Question 3

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False

Copyright laws and computer industry standards have been developed jointly and rarely conflict.

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Question 4

Locking petty cash in a safe is an example of __________________________.

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Question 5

Define and describe the importance of physical controls.

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Question 6

Explain the pass through fraud.

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Question 7

Explain the problems associated with inappropriate accounting practices.

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Question 8

Define and describe a conflict of interest.

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Question 9

Auditor independence under SOX includes categories of services that a public accounting firm cannot perform for a client. List five prohibited functions.

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Question 10

Skimming involves stealing cash from an organization after it is recorded on the organization's books and records

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Question 11

Sequentially numbering all sales invoices is an example of __________________________.

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Question 12

Business bankruptcy cases always involve fraudulent behavior.

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Question 13

Segregation of duties is an example of an internal control procedure.

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Question 14

Which of the following is not a limitation of the internal control system?

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Question 15

After data is entered into the system, it is processed. Processing control exists to make sure that the correct things happen during processing. Discuss processing controls.

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Question 16

Run-to-run control totals can be used for all of the following except

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Question 17

Contrast management fraud with employee fraud.

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Question 18

An input control that tests time card records to verify than no employee has worked more 50 hours in a pay period is an example of a range test.

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Question 19

Four underlying problems that called pre-SOX federal security law adequacy into question were addressed in the text. Discuss two of these problems.

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Question 20

Showing 1 - 20 of 161

Management fraud is regarded as more serious than employee fraud. Three special characteristics have been discussed for management fraud. What are they? Explain.

Output controls ensure that output is not lost, misdirected, or corrupted and that privacy is not violated. What are some output exposures or situations where output is at risk?

Input controls are intended to detect errors in transaction data after processing.

Copyright laws and computer industry standards have been developed jointly and rarely conflict.

Locking petty cash in a safe is an example of __________________________.

Define and describe the importance of physical controls.

Explain the pass through fraud.

Explain the problems associated with inappropriate accounting practices.

Define and describe a conflict of interest.

Auditor independence under SOX includes categories of services that a public accounting firm cannot perform for a client. List five prohibited functions.

Skimming involves stealing cash from an organization after it is recorded on the organization's books and records

Sequentially numbering all sales invoices is an example of __________________________.

Business bankruptcy cases always involve fraudulent behavior.

Segregation of duties is an example of an internal control procedure.

Which of the following is not a limitation of the internal control system?

After data is entered into the system, it is processed. Processing control exists to make sure that the correct things happen during processing. Discuss processing controls.

Run-to-run control totals can be used for all of the following except

Contrast management fraud with employee fraud.

An input control that tests time card records to verify than no employee has worked more 50 hours in a pay period is an example of a range test.

Four underlying problems that called pre-SOX federal security law adequacy into question were addressed in the text. Discuss two of these problems.

The Information System: an Accountants Perspective

Introduction to Transaction Processing

The Revenue Cycle

The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures

The Expenditure Cycle Part II: Payroll Processing and Fixed Asset Procedures

The Conversion Cycle

Financial Reporting, and Management Reporting Systems

Database Management Systems

The Rea Approach to Business Process Modeling

Enterprise Resource Planning Systems

Electronic Commerce Systems

Managing the Systems Development Life Cycle

Construct, Deliver, and Maintain Systems Projects

IT Controls Part I: Sarbanes-Oxley and It Governance

IT Controls Part II: Security and Access

IT Controls Part III: Systems Development, Program Changes, and Application Controls

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