Question 1

Which input control check would detect a posting to the wrong customer account?

Accepted Answer

A)  missing data check 
B)  check digit 
C)  reasonableness check 
D)  validity check 
A)  missing data check 
B)  check digit 
C)  reasonableness check 
D)  validity check

Question 2

Defalcation is another word for financial fraud.

Accepted Answer

A) True 
 B)False

Question 3

The decision to extend credit beyond the normal credit limit is an example of

Accepted Answer

A)  independent verification 
B)  authorization 
C)  segregation of functions 
D)  supervision 
A)  independent verification 
B)  authorization 
C)  segregation of functions 
D)  supervision

Question 4

When certain customers made cash payments to reduce their accounts receivable, the bookkeeper embezzled the cash and wrote off the accounts as uncollectible. Which control procedure would most likely prevent this irregularity?

Accepted Answer

A)  segregation of duties 
B)  accounting records 
C)  accounting system 
D)  access controls 
A)  segregation of duties 
B)  accounting records 
C)  accounting system 
D)  access controls

Question 5

A well-designed purchase order is an example of a

Accepted Answer

A)  preventive control 
B)  detective control 
C)  corrective control 
D)  none of the above 
A)  preventive control 
B)  detective control 
C)  corrective control 
D)  none of the above

Question 6

Which characteristic is not associated with software as intellectual property?

Accepted Answer

A)  uniqueness of the product 
B)  possibility of exact replication 
C)  automated monitoring to detect intruders 
D)  ease of dissemination 
A)  uniqueness of the product 
B)  possibility of exact replication 
C)  automated monitoring to detect intruders 
D)  ease of dissemination

Question 7

Who is responsible for establishing and maintaining the internal control system?

Accepted Answer

A)  the internal auditor 
B)  the accountant 
C)  management 
D)  the external auditor 
A)  the internal auditor 
B)  the accountant 
C)  management 
D)  the external auditor

Question 8

What are the key points of the "Issuer and Management Disclosure" of the Sarbanes-Oxley Act?

Accepted Answer

1. Public companies must report all off

Question 9

Management can expect various benefits to follow from implementing a system of strong internal control. Which of the following benefits is least likely to occur?

Accepted Answer

A)  Reduced cost of an external audit. 
B)  Preventing employee collusion to commit fraud. 
C)  Availability of reliable data for decision-making purposes. 
D)  Some assurance of compliance with the Foreign Corrupt Practices Act of 1977. 
E)  Some assurance that important documents and records are protected. 
A)  Reduced cost of an external audit. 
B)  Preventing employee collusion to commit fraud. 
C)  Availability of reliable data for decision-making purposes. 
D)  Some assurance of compliance with the Foreign Corrupt Practices Act of 1977. 
E)  Some assurance that important documents and records are protected.

Question 10

The external auditor is responsible for establishing and maintaining the internal control system.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an input control?

Accepted Answer

A)  Reasonableness check 
B)  Run-to-run check 
C)  Spooling check 
D)  Batch check 
E)  None are input controls 
A)  Reasonableness check 
B)  Run-to-run check 
C)  Spooling check 
D)  Batch check 
E)  None are input controls

Question 12

Which of the following best describes lapping?

Accepted Answer

A)  applying cash receipts to a different customer's account in an attempt to conceal previous thefts of funds 
B)  inflating bank balances by transferring money among different bank accounts 
C)  expensing an asset that has been stolen 
D)  creating a false transaction 
A)  applying cash receipts to a different customer's account in an attempt to conceal previous thefts of funds 
B)  inflating bank balances by transferring money among different bank accounts 
C)  expensing an asset that has been stolen 
D)  creating a false transaction

Question 13

In a computerized environment, all input controls are implemented after data is input.

Accepted Answer

A) True 
 B)False

Question 14

All of the following are factors in the fraud triangle except

Accepted Answer

A)  Ethical behavior of an individual 
B)  Pressure exerted on an individual at home and job related 
C)  Materiality of the assets 
D)  Opportunity to gain access to assets 
A)  Ethical behavior of an individual 
B)  Pressure exerted on an individual at home and job related 
C)  Materiality of the assets 
D)  Opportunity to gain access to assets

Question 15

Which check is not an input control?

Accepted Answer

A)  reasonableness check 
B)  validity check. 
C)  spooling check 
D)  missing data check 
A)  reasonableness check 
B)  validity check. 
C)  spooling check 
D)  missing data check

Question 16

Identify to indicate whether each procedure is a preventive or detective control.
a.
authorizing a credit sale
Preventive
Detective
b.
preparing a bank reconciliation
Preventive
Detective
c.
locking the warehouse
Preventive
Detective
d.
preparing a trial balance
Preventive
Detective
e.
counting inventory
Preventive
Detective

Accepted Answer

A. preventive; B. de

Question 17

A company's board of directors should, at a minimum, adopt the provisions of SOX. Discuss three of the six established best practices that a board should also follow.

Accepted Answer

The roles of CEO and board chairman shou

Question 18

Opportunity involves direct access to assets and/or access to information that controls assets.

Accepted Answer

A) True 
 B)False

Question 19

The employee entered "40" in the "hours worked per day" field. Which check would detect this unintentional error?

Accepted Answer

A)  numeric/alphabetic data check 
B)  sign check 
C)  limit check 
D)  missing data check 
A)  numeric/alphabetic data check 
B)  sign check 
C)  limit check 
D)  missing data check

Question 20

Of the three fraud factors (situational pressure, ethics, and opportunity), situational pressure is the factor that actually facilitates the act.

Accepted Answer

A) True 
 B)False

Which input control check would detect a posting to the wrong customer account?

Defalcation is another word for financial fraud.

The decision to extend credit beyond the normal credit limit is an example of

When certain customers made cash payments to reduce their accounts receivable, the bookkeeper embezzled the cash and wrote off the accounts as uncollectible. Which control procedure would most likely prevent this irregularity?

A well-designed purchase order is an example of a

Which characteristic is not associated with software as intellectual property?

Who is responsible for establishing and maintaining the internal control system?

What are the key points of the "Issuer and Management Disclosure" of the Sarbanes-Oxley Act?

Management can expect various benefits to follow from implementing a system of strong internal control. Which of the following benefits is least likely to occur?

The external auditor is responsible for establishing and maintaining the internal control system.

Which of the following is an input control?

Which of the following best describes lapping?

In a computerized environment, all input controls are implemented after data is input.

All of the following are factors in the fraud triangle except

Which check is not an input control?

A company's board of directors should, at a minimum, adopt the provisions of SOX. Discuss three of the six established best practices that a board should also follow.

Opportunity involves direct access to assets and/or access to information that controls assets.

The employee entered "40" in the "hours worked per day" field. Which check would detect this unintentional error?

Of the three fraud factors (situational pressure, ethics, and opportunity), situational pressure is the factor that actually facilitates the act.

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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Exam 3: Ethics, Fraud, and Internal Control

Which input control check would detect a posting to the wrong customer account?

Defalcation is another word for financial fraud.

The decision to extend credit beyond the normal credit limit is an example of

When certain customers made cash payments to reduce their accounts receivable, the bookkeeper embezzled the cash and wrote off the accounts as uncollectible. Which control procedure would most likely prevent this irregularity?

A well-designed purchase order is an example of a

Which characteristic is not associated with software as intellectual property?

Who is responsible for establishing and maintaining the internal control system?

What are the key points of the "Issuer and Management Disclosure" of the Sarbanes-Oxley Act?

Management can expect various benefits to follow from implementing a system of strong internal control. Which of the following benefits is least likely to occur?

The external auditor is responsible for establishing and maintaining the internal control system.

Which of the following is an input control?

Which of the following best describes lapping?

In a computerized environment, all input controls are implemented after data is input.

All of the following are factors in the fraud triangle except

Which check is not an input control?

A company's board of directors should, at a minimum, adopt the provisions of SOX. Discuss three of the six established best practices that a board should also follow.

Opportunity involves direct access to assets and/or access to information that controls assets.

The employee entered "40" in the "hours worked per day" field. Which check would detect this unintentional error?

Of the three fraud factors (situational pressure, ethics, and opportunity), situational pressure is the factor that actually facilitates the act.

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

Filters