Question 1

Management misstatement of financial statements often occurs in order to receive indirect benefits such as:

Accepted Answer

A) Decreased income taxes 
B) Delayed cash flows 
C) Increased stock prices 
D) Increased dividends 
A) Decreased income taxes 
B) Delayed cash flows 
C) Increased stock prices 
D) Increased dividends

Question 2

An example of Cash receipts fraud would include:

Accepted Answer

A) an employee steals checks collected from customers. 
B) an employee overstates hours worked on a timecard. 
C) management understates accounts payable amounts . 
D) an employee steals checks before being paid to vendors. 
A) an employee steals checks collected from customers. 
B) an employee overstates hours worked on a timecard. 
C) management understates accounts payable amounts . 
D) an employee steals checks before being paid to vendors.

Question 3

This level of assurance means that controls achieve a sensible balance of reducing risk when compared with the cost of the control.

Accepted Answer

A) Absolute assurance 
B) Probable assurance 
C) Reasonable assurance 
D) Convincing assurance 
A) Absolute assurance 
B) Probable assurance 
C) Reasonable assurance 
D) Convincing assurance

Question 4

The risks related to computerized systems are adequately covered by the COS internal control report.

Accepted Answer

A) True 
 B)False

Question 5

The authors presented their "picture" of internal control as a series of umbrellas which represent different types of controls.Which of the following is not one of those types of controls?

Accepted Answer

A) Prevention 
B) Investigation 
C) Detection 
D) Correction 
A) Prevention 
B) Investigation 
C) Detection 
D) Correction

Question 6

Due to management's responsibility to monitor operations by examining reports that summarize the results of operations, it is necessary that the system provide timely and accurate information.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is the most common method of detecting occupational fraud?

Accepted Answer

A) Financial Statement Audit 
B) Management Review 
C) Internal Audit 
D) Tip from an employee, customer, or vendor 
A) Financial Statement Audit 
B) Management Review 
C) Internal Audit 
D) Tip from an employee, customer, or vendor

Question 8

All of the following are reasons why it is not possible to eliminate all fraud risks, except

Accepted Answer

A) Human Error 
B) Human Behavior 
C) Opportunity 
D) May not be cost effective 
A) Human Error 
B) Human Behavior 
C) Opportunity 
D) May not be cost effective

Question 9

The theft of any item of value is referred to as:

Accepted Answer

A) Fraudulent financial reporting 
B) Misappropriation of assets 
C) Misstatement of financial records 
D) Earnings management 
A) Fraudulent financial reporting 
B) Misappropriation of assets 
C) Misstatement of financial records 
D) Earnings management

Question 10

Financial pressures, market pressures, job-related failures, and addictive behaviors are all examples of which condition of the Fraud Triangle?

Accepted Answer

A) Opportunity 
B) Conversion 
C) Incentive 
D) Rationalization 
A) Opportunity 
B) Conversion 
C) Incentive 
D) Rationalization

Question 11

Which of the following statements is false, related to the authorization of transactions?

Accepted Answer

A) Every transaction that occurs must be properly authorized in some manner. 
B) General authorization is the set of guidelines that allows transactions to be completed as long as they fall within established parameters. 
C) It is not possible, nor is it important, to try to ensure that an organization engage only in transactions that are authorized. 
D) Specific authorization that explicit approval is needed for that single transaction to be completed. 
A) Every transaction that occurs must be properly authorized in some manner. 
B) General authorization is the set of guidelines that allows transactions to be completed as long as they fall within established parameters. 
C) It is not possible, nor is it important, to try to ensure that an organization engage only in transactions that are authorized. 
D) Specific authorization that explicit approval is needed for that single transaction to be completed.

Question 12

Companies that reward management with incentives to achieve a growth in earnings is running the risk that management will also have more motivation and pressure to falsify the financial statements to show the higher amounts.

Accepted Answer

A) True 
 B)False

Question 13

The risk related to this category of Trust Services Principles is that personal information about customers may be used inappropriately or accessed by those either inside or outside the company.

Accepted Answer

A) Confidentiality 
B) Online privacy 
C) Security 
D) Availability 
A) Confidentiality 
B) Online privacy 
C) Security 
D) Availability

Question 14

The control environment component of internal control was identified to have a number of different factors.Which of the following is NOT one of those factors?

Accepted Answer

A) Management's oversight responsibility, including its philosophy and operating style 
B) The identification of sources of risk 
C) The integrity and ethical values of the entity's people 
D) The attention and direction provided by the board of directors 
A) Management's oversight responsibility, including its philosophy and operating style 
B) The identification of sources of risk 
C) The integrity and ethical values of the entity's people 
D) The attention and direction provided by the board of directors

Question 15

Which control activity is intended to serve as a method to confirm the accuracy or completeness of data in the accounting system?

Accepted Answer

A) Authorization 
B) Segregation of duties 
C) Security of assets 
D) Independent checks and reconciliations 
A) Authorization 
B) Segregation of duties 
C) Security of assets 
D) Independent checks and reconciliations

Question 16

Segregation of duties is a fundamental concept in an effective system of internal controls.Nevertheless, the effectiveness of this control can be compromised through which situation?

Accepted Answer

A) A lack of employee training 
B) Collusion among employees 
C) Irregular employee reviews 
D) The absence of an internal audit function 
A) A lack of employee training 
B) Collusion among employees 
C) Irregular employee reviews 
D) The absence of an internal audit function

Question 17

Jamie Stark, a sales employee, stole merchandise from her employer, and Frank Adams, the accounting clerk, covered it up by altering the inventory records.This is an example of:

Accepted Answer

A) Inventory theft 
B) Financial journal fraud 
C) Skimming 
D) Collusion 
A) Inventory theft 
B) Financial journal fraud 
C) Skimming 
D) Collusion

Question 18

The chance for fraud or ethical lapses will not be reduced if management:

Accepted Answer

A) Emphasizes ethical behavior 
B) Models ethical behavior 
C) Hires ethical employees 
D) Is unethical 
A) Emphasizes ethical behavior 
B) Models ethical behavior 
C) Hires ethical employees 
D) Is unethical

Question 19

Collusion can make it much easier to commit and conceal a fraud or theft, even when proper internal controls are in place.

Accepted Answer

A) True 
 B)False

Question 20

It is not possible to have an internal control system that will provide absolute assurance.

Accepted Answer

A) True 
 B)False

Management misstatement of financial statements often occurs in order to receive indirect benefits such as:

An example of Cash receipts fraud would include:

This level of assurance means that controls achieve a sensible balance of reducing risk when compared with the cost of the control.

The risks related to computerized systems are adequately covered by the COS internal control report.

The authors presented their "picture" of internal control as a series of umbrellas which represent different types of controls.Which of the following is not one of those types of controls?

Due to management's responsibility to monitor operations by examining reports that summarize the results of operations, it is necessary that the system provide timely and accurate information.

Which of the following is the most common method of detecting occupational fraud?

All of the following are reasons why it is not possible to eliminate all fraud risks, except

The theft of any item of value is referred to as:

Financial pressures, market pressures, job-related failures, and addictive behaviors are all examples of which condition of the Fraud Triangle?

Which of the following statements is false, related to the authorization of transactions?

Companies that reward management with incentives to achieve a growth in earnings is running the risk that management will also have more motivation and pressure to falsify the financial statements to show the higher amounts.

The risk related to this category of Trust Services Principles is that personal information about customers may be used inappropriately or accessed by those either inside or outside the company.

The control environment component of internal control was identified to have a number of different factors.Which of the following is NOT one of those factors?

Which control activity is intended to serve as a method to confirm the accuracy or completeness of data in the accounting system?

Segregation of duties is a fundamental concept in an effective system of internal controls.Nevertheless, the effectiveness of this control can be compromised through which situation?

Jamie Stark, a sales employee, stole merchandise from her employer, and Frank Adams, the accounting clerk, covered it up by altering the inventory records.This is an example of:

The chance for fraud or ethical lapses will not be reduced if management:

Collusion can make it much easier to commit and conceal a fraud or theft, even when proper internal controls are in place.

It is not possible to have an internal control system that will provide absolute assurance.

Introduction to AIS

Foundational Concepts of the AIS

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Auditing Information Technology Bases Processes

Revenue and Cash Collection Processes

Expenditures Processes and Controls - Purchases

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters

Exam 3: Fraud, Ethics, and Internal Control

Management misstatement of financial statements often occurs in order to receive indirect benefits such as:

An example of Cash receipts fraud would include:

This level of assurance means that controls achieve a sensible balance of reducing risk when compared with the cost of the control.

The risks related to computerized systems are adequately covered by the COS internal control report.

The authors presented their "picture" of internal control as a series of umbrellas which represent different types of controls.Which of the following is not one of those types of controls?

Due to management's responsibility to monitor operations by examining reports that summarize the results of operations, it is necessary that the system provide timely and accurate information.

Which of the following is the most common method of detecting occupational fraud?

All of the following are reasons why it is not possible to eliminate all fraud risks, except

The theft of any item of value is referred to as:

Financial pressures, market pressures, job-related failures, and addictive behaviors are all examples of which condition of the Fraud Triangle?

Which of the following statements is false, related to the authorization of transactions?

Companies that reward management with incentives to achieve a growth in earnings is running the risk that management will also have more motivation and pressure to falsify the financial statements to show the higher amounts.

The risk related to this category of Trust Services Principles is that personal information about customers may be used inappropriately or accessed by those either inside or outside the company.

The control environment component of internal control was identified to have a number of different factors.Which of the following is NOT one of those factors?

Which control activity is intended to serve as a method to confirm the accuracy or completeness of data in the accounting system?

Segregation of duties is a fundamental concept in an effective system of internal controls.Nevertheless, the effectiveness of this control can be compromised through which situation?

Jamie Stark, a sales employee, stole merchandise from her employer, and Frank Adams, the accounting clerk, covered it up by altering the inventory records.This is an example of:

The chance for fraud or ethical lapses will not be reduced if management:

Collusion can make it much easier to commit and conceal a fraud or theft, even when proper internal controls are in place.

It is not possible to have an internal control system that will provide absolute assurance.

Introduction to AIS

Foundational Concepts of the AIS

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Auditing Information Technology Bases Processes

Revenue and Cash Collection Processes

Expenditures Processes and Controls - Purchases

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters