Question 1

Which of the following is not an internal control procedure?

Accepted Answer

A)  authorization
B)  management's operating style
C)  independent verification
D)  accounting records

Question 2

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

Question 3

SOX requires:

Accepted Answer

A)  public companies to report all off-balance sheet transactions
B)  management to accept responsibility for maintaining adequate internal controls
C)  officers to certify that company accounts fairly present the results of operations
D)  all of the above

Question 4

Database management fraud includes altering,updating,and deleting an organization's data.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Describe factors that influence the number of backup files needed for each application.

Accepted Answer

The systems designer determines the numb...

Question 7

Which of the following is a preventive control?

Accepted Answer

A)  credit check before approving a sale on account
B)  bank reconciliation
C)  physical inventory count
D)  comparing the accounts receivable subsidiary ledger to the control account

Question 8

Explain the shell company fraud.

Accepted Answer

A shell company fraud first requires tha...

Question 9

An inventory record indicates that 12 items of a specific product are on hand.A customer purchased two of the items,but when recording the order,the data entry clerk mistakenly entered 20 items sold.Which check could detect this error?

Accepted Answer

A)  numeric/alphabetic data checks
B)  limit check
C)  range check
D)  reasonableness check

Question 10

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

Accepted Answer

The answer of Locking petty cash in a safe is...

Question 11

What are the three categories of processing control?

Accepted Answer

Batch controls,run-t...

Question 12

Which input control check would detect a payment made to a nonexistent vendor?

Accepted Answer

A)  missing data check
B)  numeric/alphabetic check
C)  range check
D)  validity check

Question 13

The text discusses a red-flag checklist of questions regarding personal traits of executives which might help uncover fraudulent activity.List three of these questions.

Accepted Answer

Questions relate to any of the following...

Question 14

The internal audit department recalculates payroll for several employees each pay period.This is an example of __________________________.

Accepted Answer

independen...

Question 15

The most cost-effective type of internal control is

Accepted Answer

A)  preventive control
B)  accounting control
C)  detective control
D)  corrective control

Question 16

If input and processing controls are adequate,why are output controls needed?

Accepted Answer

Output controls are designed to ensure t...

Question 17

How has the Sarbanes-Oxley Act had a significant impact on corporate governance?

Accepted Answer

The Sarbanes-Oxley Act requires all audi...

Question 18

Which of the following is not an example of independent verification?

Accepted Answer

A)  comparing fixed assets on hand to the accounting records
B)  performing a bank reconciliation
C)  comparing the accounts payable subsidiary ledger to the control account
D)  permitting only authorized users to access the accounting system

Question 19

Give two examples of employee fraud and explain how the theft might occur.

Accepted Answer

Answers will vary but should involve (1)...

Question 20

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.

Accepted Answer

Processing controls take three forms-bat...

Exam 3: Ethics,fraud,and Internal Control

What are the three categories of processing control?

Correct AnswerverifiedBatch controls,run-t...View AnswerShow Answer

Which of the following is not an internal control procedure?

Correct AnswerverifiedShow Answer

Give two examples of employee fraud and explain how the theft might occur.

Correct AnswerverifiedAnswers will vary but should involve (1)...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedProcessing controls take three forms-bat...View AnswerShow Answer

Which input control check would detect a payment made to a nonexistent vendor?

Correct AnswerverifiedShow Answer

The internal audit department recalculates payroll for several employees each pay period.This is an example of __________________________.

Correct Answerverifiedindependen...View AnswerShow Answer

Which of the following is a preventive control?

Correct AnswerverifiedShow Answer

The most cost-effective type of internal control is

Correct AnswerverifiedShow Answer

An inventory record indicates that 12 items of a specific product are on hand.A customer purchased two of the items,but when recording the order,the data entry clerk mistakenly entered 20 items sold.Which check could detect this error?

Correct AnswerverifiedShow Answer

Which of the following is not an example of independent verification?

Correct AnswerverifiedShow Answer

If input and processing controls are adequate,why are output controls needed?

Correct AnswerverifiedOutput controls are designed to ensure t...View AnswerShow Answer

Describe factors that influence the number of backup files needed for each application.

Correct AnswerverifiedThe systems designer determines the numb...View AnswerShow Answer

Explain the shell company fraud.

Correct AnswerverifiedA shell company fraud first requires tha...View AnswerShow Answer

Database management fraud includes altering,updating,and deleting an organization's data.

Correct AnswerverifiedShow Answer

SOX requires:

Correct AnswerverifiedShow Answer

How has the Sarbanes-Oxley Act had a significant impact on corporate governance?

Correct AnswerverifiedThe Sarbanes-Oxley Act requires all audi...View AnswerShow Answer

The text discusses a red-flag checklist of questions regarding personal traits of executives which might help uncover fraudulent activity.List three of these questions.

Correct AnswerverifiedQuestions relate to any of the following...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

A well-designed purchase order is an example of a

Correct AnswerverifiedShow Answer

Correct Answer
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Batch controls,run-t...
View Answer

Correct Answer
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Correct Answer
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Answers will vary but should involve (1)...
View Answer

Correct Answer
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Correct Answer
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Processing controls take three forms-bat...
View Answer

Correct Answer
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Correct Answer
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independen...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Output controls are designed to ensure t...
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Correct Answer
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The systems designer determines the numb...
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Correct Answer
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A shell company fraud first requires tha...
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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The Sarbanes-Oxley Act requires all audi...
View Answer

Correct Answer
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Questions relate to any of the following...
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Correct Answer
verified

Correct Answer
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