Quiz
Chapter 13 - Simkin
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Fragen in diesem Quiz (25)
1Three objectives of a company's internal control system should be safeguarding assets, checking the accuracy and reliability of accounting data, and promoting operational efficiency. A fourth objective of a company's internal control system should be:
- APreventing embezzlement of assets
- BEncouraging adherence to prescribed managerial policies
- CAvoiding the payment of overtime to company employees
- DRevising standards for production costs on a weekly basis
2The control environment is a component of a company's internal control system that:
- AInfluences the control awareness of a company's employees
- BStresses the development of control procedures in a company
- CDirectly affects the accuracy and reliability of a company’s accounting data
- DCan be ignored when establishing a company's internal control system
3The preventative controls within a company’s internal control system:
- AForm the foundation for all of a company's other internal control components
- BFocus on management’s philosophy and operating style
- CIgnore the risk factor associated with a company's control procedures
- DRelate to safeguarding a company's assets and checking the accuracy and reliability of the company's accounting data
4Which of the following statements is true?
- AThe COSO report failed to define internal control
- BThe COSO report emphasized that an internal control system is a tool of
management - CSAS 78 rejected the definition of internal control provided in the COSO report
- DCOBIT concluded that a company's management is not responsible for establishing and monitoring a company's internal control system
5Regarding the cost-benefit concept, which of the following statements is true?
- AEvery control procedure that offers benefits to a company should be implemented into the company's system
- BAn optimal internal control package is developed for a company's system by implementing a standardized package of control procedures
- CA control procedure is considered cost effective if it can be determined that the cost of operating the procedure will be cheaper in the current period compared to the previous period
- DA control procedure is considered cost effective when its anticipated benefits exceed its anticipated costs
6Which of the following frameworks is widely used by managers to organize and evaluate their corporate governance structure?
- ACOBIT
- BCOSO
- CNIST
- DSAS No. 94
7Which of the following fundamental concepts is stressed by the COSO report?
- AInternal control is not affected by people
- BInternal control is geared to the achievement of a company's objectives in the financial reporting area only
- CInternal control is designed to detect all errors and irregularities that occur within a company's system
- DInternal control is a process
8Regarding a company's audit trail, which of the following statements is true?
- Aa) Because of the complexities involved in establishing an audit trail, a good audit trail normally makes it more difficult for an individual to follow the flow of a company's business transactions through the company's information system
- BIn actuality, the audit trail established within a company's information system is an unimportant element of the company's internal control system
- CWhen a company's audit trail becomes more difficult to follow, this causes an increase in the risk of errors or irregularities taking place in the processing of accounting transactions and not being detected
- DA company's policies and procedures manual should not be part of its audit trail since confidential information is included within this manual
9If the same employee is responsible for authorizing a business transaction and recording the transaction in the accounting records, this indicates a weakness in which element of a company's internal control system?
- AA good audit trail
- BSeparation of duties
- CInternal review of controls
- DCompetent employees
10Which of the following statements is true regarding timely performance reports?
- AIn many companies, these reports are the major means of providing information to management concerning the actual operations of the companies’ internal control systems
- BThese reports should only include monetary data
- CSince these reports fail to provide feedback to management on the operations of previously implemented internal control procedures, other techniques are needed to provide this feedback to managers
- DThe complexity that a computer introduces into a company's information system will typically prevent the preparation of timely performance reports for the company's management
11The COSO report stresses that:
- AInternal control is a process
- BAn internal control system, if properly designed, can become a substitute for management
- CPeople only at high levels of an organization are an important part of an internal control system
- DAn internal control system should consist of three interrelated components: the control environment, risk assessment, and control activities
12Regarding COBIT, which of the statements is true?
- ACOBIT means Cost Objectives for Information and Related Technology
- BCOBIT rejects the definition of internal control from the COSO report
- CCOBIT states that a company’s management should play a minor role in establishing an internal control system
- DCOBIT classifies people as one of the primary resources managed by various IT processes
13The component of an internal control system that concerns itself with the way a company’s management assigns authority and responsibility is called:
- AMonitoring
- BControl environment
- CRisk assessment
- DInformation
14_________________ describes the policies, plans, and procedures implemented by a firm to protect its assets.
- AInternal control
- BSAS No. 94
- CSOX, Section 404
- DEnterprise risk management
15The 1992 COSO report identifies five components for an effective internal control system. These are:
- AControl environment, risk assessment, control activities, information and communication, and monitoring
- BControl environment, control procedures, control activities, communication, and monitoring
- CControl procedures, control activities, information, communication, and monitoring
- DControl procedures, risk assessment, control activities, information and communication, and monitoring
16The 1992 COSO report identifies five components for an effective internal control system. Which of those five establishes the tone of a company and influences the control awareness of the company’s employees?
- AControl procedures
- BControl environment
- CControl activities
- DInformation and communication
17The 1992 COSO report identifies five components for an effective internal control system. Which of those five includes the methods used to record, process, summarize, and report a company’s transactions?
- AControl procedures
- BControl environment
- CControl activities
- DInformation and communication
18The Enterprise Risk Management (ERM) framework is based on the 1992 COSO report and adds three additional components for an effective internal control system. Which of the following is not one of those three?
- AObjective setting
- BEvent identification
- CControl assessment
- DRisk response
19The purpose of ________________ is to identify organizational risks, analyze their potential in terms of costs and likelihood of occurrence, and install those controls whose projected benefits outweigh their costs.
- AInternal controls
- BA control environment
- CRisk assessment
- DManagement consultants
20When assessing a company’s internal control structure policies and procedures, the primary consideration is whether they
- APrevent management override
- BRelate to the control environment
- CReflect management’s philosophy and operating style
- DAffect the financial statement assertions
21Which one of the following functions performed in an organization is a violation of internal control?
- AA mail clerk opening the mail compares the check received with the source document accompanying the payment, noting the amount paid, then forwards the checks daily (along with a listing of the cash receipts) to the Cashier for deposit
- BA mail clerk opening the mail compares the check received with the source document accompanying the payment, noting the amount paid, then forwards the source documents that accompany the payments (along with a listing of the cash receipts) to Accounts Receivable, on a daily basis, for posting to the subsidiary ledger
- CAt the end of the week the Cashier prepares a deposit slip for all of the cash receipts received during the week
- DThe General Ledger clerk compares the summary journal entry, received from the Cashier for cash receipts applicable to outstanding accounts, with the batch total for posting to the Subsidiary Ledger by the Accounts Receivable clerk
22Which one of the following methods for the distribution of employees’ paychecks would provide the best internal control for the organization?
- ADelivery of the paychecks to each department supervisor, who in turn would distribute paychecks directly to the employees in his/her department
- BDirect deposit in each employee’s personal bank account
- CDistribution of paychecks directly to each employee by a representative of the Human Resource department
- DDistribution of paychecks directly to each employee by the payroll manager
23Which one of the following would be most effective in deterring the commission of fraud?
- APolicies of strong internal control, segregation of duties, and requiring employees to take vacations
- BPolicies of strong internal control and punishments for unethical behavior
- CEmployee training, segregation of duties, and punishment for unethical behavior
- DHiring ethical employees, employee training, and segregation of duties
24When management of the sales department has the opportunity to override the system of internal controls of the accounting department, a weakness exists in
- ARisk management
- BInformation and communication
- CMonitoring
- DThe control environment
25Segregation of duties is a fundamental concept in an effective system of internal control. Nevertheless, the internal auditor must be aware that this safeguard can be compromised through
- ALack of training of employees
- BCollusion among employees
- CIrregular employee reviews
- DAbsence of internal auditing
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- Beschreibung
- 1 AIS Quiz am Chapter 13 - Simkin, erstellt von Rebecca Escobar am 12/12/2016.
- Autor
- Rebecca Escobar
- Sprache
- English
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