Question 1

Which SOX section requires the chief executive officer and the chief financial officer to disclose to the auditors and the audit committee of the board of directors all significant deficiencies in internal controls, which could adversely affect the ability to record, process, summarize, and report financial data and any material weaknesses in internal controls?

Accepted Answer

A) Section 806. Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud 
B) Section 404. Management Assessment of Internal Controls 
C) Section 906. Corporate Responsibility for Financial Reports 
D) Section 302. Corporate Responsibility for Financial Reports

Question 2

The SOX legislation basically requires management of privately held companies must assess and report on the effectiveness of internal controls for financial reporting using a recognized framework.

Accepted Answer

A) True 
 B)False

Question 3

The accounting profession is self-regulated.

Accepted Answer

A) True 
 B)False

Question 4

Which SOX section requires the public accounting firm that audits the financial statements of the company to issue an attestation report regarding the effectiveness of the company's internal controls?

Accepted Answer

A) Section 806. Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud 
B) Section 404. Management Assessment of Internal Controls 
C) Section 906. Corporate Responsibility for Financial Reports 
D) Section 302. Corporate Responsibility for Financial Reports

Question 5

What are the objectives of internal control?

Accepted Answer

The answer of What are the objectives of internal control?...

Question 6

Define or explain the five principle the on which the Trust Services framework is based.

Accepted Answer

The answer of Define or explain the five principle the...

Question 7

Earnings management focuses on managing when revenues and expenses are recorded in order to favorably reflect a company's financial performance in a(n)________.

Accepted Answer

A) illegal manner 
B) legal manner 
C) questionable manner 
D) vague manner

Question 8

SOX emphasizes a strong system of internal control as a way of avoiding Enron-sized accounting frauds.

Accepted Answer

A) True 
 B)False

Question 9

Which audit type requires the auditor to conduct tests of controls to obtain evidence that internal control over financial reporting has operated effectively?

Accepted Answer

A) Audit of financial reporting control 
B) Audit of financial statements 
C) Audit of internal control 
D) IT audit

Question 10

A(n)________ in internal control over financial reporting is defined as a deficiency as such that there is a reasonable possibility that a material misstatement of financial statements will not be prevented or detected in a timely basis.

Accepted Answer

The answer of A(n)________ in internal control over financial reporting...

Question 11

A(n)________ over financial reporting requires the auditor to conduct tests of controls to obtain evidence that internal control over financial reporting has operated effectively.

Accepted Answer

The answer of A(n)________ over financial reporting requires the auditor...

Question 12

Define the two types of SOC 2 reports.

Accepted Answer

The answer of Define the two types of SOC 2...

Question 13

In the COSO Internal Control-Integrated Framework, risk assessment objectives include all of the following EXCEPT

Accepted Answer

A) Identification and analysis of financial reporting risks 
B) Importance of financial reporting objectives 
C) Assessment of fraud risk 
D) Risks of financial controls

Question 14

How long does the typical fraud last before being detected?

Accepted Answer

A) Six months 
B) One year 
C) Two years 
D) Three years

Question 15

Internal controls for the accounting system are incomplete without IT controls.

Accepted Answer

A) True 
 B)False

Question 16

Internal control is a set of policies, procedures, and activities to achieve an enterprise's objectives that are related to what?

Accepted Answer

The answer of Internal control is a set of policies,...

Question 17

Match the internal auditors code of conduct principle with the appropriate definition.
-Integrity

Accepted Answer

A) Shall engage only in those services for which they have the necessary knowledge, skills, and experience. 
B) Shall be prudent in the use and protection of information acquired in the course of their duties. 
C) Shall perform their work with honesty, diligence, and responsibility. 
D) Shall not participate in any activity or relationship that may impair or be presumed to impair their unbiased assessment.

Question 18

Match the privacy principle to the correct 
-Disclosure to Third Parties
definition.

Accepted Answer

A) The entity defines, documents, communicates, and assigns accountability for its privacy policies and procedures. 
B) The entity provides information about its privacy policies and procedures and identifies the purposes for which personal information is collected, used, retained, and disclosed. 
C) The entity limits the use of personal information to the purposes identified in the notice and for which the individual has provided implicit or explicit consent. The entity retains personal information only for as long as necessary to fulfill the stated purposes. 
D) The entity maintains accurate, complete, and relevant personal information for the purposes identified in the notice. 
E) The entity shares personal information to third parties only for the purposes identified in the notice and with the implicit or explicit consent of the individual.
F)The entity monitors compliance with its privacy policies and procedures and has procedures to address privacy-related complaints and disputes.
G)The entity provides individuals their personal information for review and update.
H)The entity collects personal information only for the purposes identified in the notice.
I)The entity describes the choices available to the individual and obtains implicit or explicit consent with respect to the collection, use, and disclosure of personal information.
J)The entity protects personal information against unauthorized access (both physical and logical).

Question 19

List and describe the principles for establishing an environment to effectively manage fraud risk.

Accepted Answer

The answer of List and describe the principles for establishing...

Question 20

What is SOX?

Accepted Answer

The answer of What is SOX?...

Exam 10: Fraud and Internal Control

The SOX legislation basically requires management of privately held companies must assess and report on the effectiveness of internal controls for financial reporting using a recognized framework.

The accounting profession is self-regulated.

Which SOX section requires the public accounting firm that audits the financial statements of the company to issue an attestation report regarding the effectiveness of the company's internal controls?

What are the objectives of internal control?

Define or explain the five principle the on which the Trust Services framework is based.

Earnings management focuses on managing when revenues and expenses are recorded in order to favorably reflect a company's financial performance in a(n) ________.

SOX emphasizes a strong system of internal control as a way of avoiding Enron-sized accounting frauds.

Which audit type requires the auditor to conduct tests of controls to obtain evidence that internal control over financial reporting has operated effectively?

A(n)________ in internal control over financial reporting is defined as a deficiency as such that there is a reasonable possibility that a material misstatement of financial statements will not be prevented or detected in a timely basis.

A(n)________ over financial reporting requires the auditor to conduct tests of controls to obtain evidence that internal control over financial reporting has operated effectively.

Define the two types of SOC 2 reports.

In the COSO Internal Control-Integrated Framework, risk assessment objectives include all of the following EXCEPT

How long does the typical fraud last before being detected?

Internal controls for the accounting system are incomplete without IT controls.

Internal control is a set of policies, procedures, and activities to achieve an enterprise's objectives that are related to what?

Match the internal auditors code of conduct principle with the appropriate definition. -Integrity

Match the privacy principle to the correct -Disclosure to Third Parties definition.

List and describe the principles for establishing an environment to effectively manage fraud risk.

What is SOX?