Question 1

The tone at the top of the organization tends to flow through the entire organization and affects behavior at all levels.

Accepted Answer

A) True 
 B)False

Question 2

Industrial espionage can occur with or without the use of a computer.

Accepted Answer

A) True 
 B)False

Question 3

Collusion can occur only when two employees who work for the same firm conspire to circumvent the internal controls to commit fraud or theft.

Accepted Answer

A) True 
 B)False

Question 4

A company's cash custody function should be separated from the related cash recordkeeping function in order to:

Accepted Answer

A) Physically safeguard the cash 
B) Establish accountability for the cash 
C) Prevent the payment of cash disbursements from cash receipts 
D) Minimize opportunities for misappropriations of cash
TEST BANK - CHAPTER 3 - MULTIPLE CHOICE 
A) Physically safeguard the cash 
B) Establish accountability for the cash 
C) Prevent the payment of cash disbursements from cash receipts 
D) Minimize opportunities for misappropriations of cash
TEST BANK - CHAPTER 3 - MULTIPLE CHOICE

Question 5

Which of the following is generally an external computer fraud, rather than an internal computer fraud?

Accepted Answer

A) Spoofing 
B) Input manipulation 
C) Program manipulation 
D) Output manipulation 
A) Spoofing 
B) Input manipulation 
C) Program manipulation 
D) Output manipulation

Question 6

In order for a code of ethics to reduce opportunities for managers and employees to commit fraud, it is necessary that management emphasizes this code.Punishment related to violations of the code are not necessary.

Accepted Answer

A) True 
 B)False

Question 7

Independent checks can serve as a preventive control in that they uncover problems in the data or the processing.

Accepted Answer

A) True 
 B)False

Question 8

The Phar-Mor fraud began when management:

Accepted Answer

A) Forgot to change the budgeted figures that had been incorrectly computed. 
B) Limit access to physical hardware. 
C) Both A and B 
D) None of the Above. 
A) Forgot to change the budgeted figures that had been incorrectly computed. 
B) Limit access to physical hardware. 
C) Both A and B 
D) None of the Above.

Question 9

A poor control environment can be overcome if the remaining components of internal control are strong.

Accepted Answer

A) True 
 B)False

Question 10

One of the components of internal control identified by COSO required that management must be considering threats and the potential for risks, and stand ready to respond should these events occur.This component is referred to as:

Accepted Answer

A) Control Environment 
B) Control Activities 
C) Risk Assessment 
D) Communication 
A) Control Environment 
B) Control Activities 
C) Risk Assessment 
D) Communication

Question 11

When management does not act ethically, fraud is more likely to occur.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following was NOT listed as a procedure to accomplish independent checks?

Accepted Answer

A) Recalculation of amounts 
B) Analysis of reports 
C) Review of auditing procedures 
D) Reconciliation 
A) Recalculation of amounts 
B) Analysis of reports 
C) Review of auditing procedures 
D) Reconciliation

Question 13

E-mail spoofing is more of an irritation to an organization that a fraud threat.

Accepted Answer

A) True 
 B)False

Question 14

Defalcation and internal theft are names that refer to the misstatement of financial records.

Accepted Answer

A) True 
 B)False

Question 15

According to the authors of this textbook, which of the following is not one of general categories of people who commit fraud?

Accepted Answer

A) Employees 
B) Government Agencies 
C) Customers 
D) Management 
A) Employees 
B) Government Agencies 
C) Customers 
D) Management

Question 16

This type of control is included in the internal control system because it is not always possible to prevent all frauds.They help employees to discover or uncover errors, fraud, or unauthorized events.

Accepted Answer

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

Question 17

AICPA Trust Principles identify five categories of risks and controls.Which category is best described by the statement, "Information process could be inaccurate, incomplete, or not properly authorized"?

Accepted Answer

A) Security 
B) Availability 
C) Processing integrity 
D) Confidentiality 
A) Security 
B) Availability 
C) Processing integrity 
D) Confidentiality

Question 18

This type of control is designed to avoid errors, fraud, or events not authorized by management.

Accepted Answer

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

Question 19

It is necessary to use a computer to accomplish software piracy.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not an example of employee fraud?

Accepted Answer

A) Skimming 
B) Larceny 
C) Kickbacks 
D) Earnings management 
A) Skimming 
B) Larceny 
C) Kickbacks 
D) Earnings management

The tone at the top of the organization tends to flow through the entire organization and affects behavior at all levels.

Industrial espionage can occur with or without the use of a computer.

Collusion can occur only when two employees who work for the same firm conspire to circumvent the internal controls to commit fraud or theft.

A company's cash custody function should be separated from the related cash recordkeeping function in order to:

Which of the following is generally an external computer fraud, rather than an internal computer fraud?

In order for a code of ethics to reduce opportunities for managers and employees to commit fraud, it is necessary that management emphasizes this code.Punishment related to violations of the code are not necessary.

Independent checks can serve as a preventive control in that they uncover problems in the data or the processing.

The Phar-Mor fraud began when management:

A poor control environment can be overcome if the remaining components of internal control are strong.

One of the components of internal control identified by COSO required that management must be considering threats and the potential for risks, and stand ready to respond should these events occur.This component is referred to as:

When management does not act ethically, fraud is more likely to occur.

Which of the following was NOT listed as a procedure to accomplish independent checks?

E-mail spoofing is more of an irritation to an organization that a fraud threat.

Defalcation and internal theft are names that refer to the misstatement of financial records.

According to the authors of this textbook, which of the following is not one of general categories of people who commit fraud?

This type of control is included in the internal control system because it is not always possible to prevent all frauds.They help employees to discover or uncover errors, fraud, or unauthorized events.

AICPA Trust Principles identify five categories of risks and controls.Which category is best described by the statement, "Information process could be inaccurate, incomplete, or not properly authorized"?

This type of control is designed to avoid errors, fraud, or events not authorized by management.

It is necessary to use a computer to accomplish software piracy.

Which of the following is not an example of employee fraud?

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

The tone at the top of the organization tends to flow through the entire organization and affects behavior at all levels.

Industrial espionage can occur with or without the use of a computer.

Collusion can occur only when two employees who work for the same firm conspire to circumvent the internal controls to commit fraud or theft.

A company's cash custody function should be separated from the related cash recordkeeping function in order to:

Which of the following is generally an external computer fraud, rather than an internal computer fraud?

In order for a code of ethics to reduce opportunities for managers and employees to commit fraud, it is necessary that management emphasizes this code.Punishment related to violations of the code are not necessary.

Independent checks can serve as a preventive control in that they uncover problems in the data or the processing.

The Phar-Mor fraud began when management:

A poor control environment can be overcome if the remaining components of internal control are strong.

One of the components of internal control identified by COSO required that management must be considering threats and the potential for risks, and stand ready to respond should these events occur.This component is referred to as:

When management does not act ethically, fraud is more likely to occur.

Which of the following was NOT listed as a procedure to accomplish independent checks?

E-mail spoofing is more of an irritation to an organization that a fraud threat.

Defalcation and internal theft are names that refer to the misstatement of financial records.

According to the authors of this textbook, which of the following is not one of general categories of people who commit fraud?

This type of control is included in the internal control system because it is not always possible to prevent all frauds.They help employees to discover or uncover errors, fraud, or unauthorized events.

AICPA Trust Principles identify five categories of risks and controls.Which category is best described by the statement, "Information process could be inaccurate, incomplete, or not properly authorized"?

This type of control is designed to avoid errors, fraud, or events not authorized by management.

It is necessary to use a computer to accomplish software piracy.

Which of the following is not an example of employee fraud?

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