Exam 9: Introduction to Internal Control Systems

A periodic review by internal auditors that stresses the evaluation of the efficiency and effectiveness of a department's procedures is called a an):

Preventive and corrective controls are established solely to discourage fraud and embezzlement by an organization's employees.

A good internal control system will contribute towards detecting accidental errors made by employees.

Both cash and credit customers are educated to expect a sales ticket.Tickets are serially numbered.All numbers are accounted for daily.

Freije Refrigeration Company has an inventory of raw materials and parts consisting of thousands of different items which are of small dollar value individually but significant in total.A fundamental control requirement of Freije's inventory system is that:

When assessing a company's internal control structure policies and procedures, the primary consideration is whether they

Assume that a company designs and implements a control procedure whereby the accountant who is responsible for recording cash receipts transactions does not have access to the cash itself.This control procedure is an example of a:

A general rule that should be followed when developing control procedures for a company's assets is:

The introduction of a computer into an organization's data processing system will normally eliminate problems associated with following the organization's audit trail.

Control procedures that are designed to remedy problems discovered through detective controls are called:

The COSO report failed to define internal control.

For control purposes, the quantities of materials ordered may be omitted from the copy of the purchase order which is:

The duties of cashier and accounts?receivable bookkeeper should be separated.

The control environment is a component of a company's internal control system that:

Which one of the following would be most effective in deterring the commission of fraud?

The 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?

The maintenance of backup copies of a company's important transaction and master files is an example of a:

An approach used by many companies to reduce the risk of loss caused by the theft of assets by employees is to:

Timely performance reports contribute towards achieving the monitoring component of an internal control system.

The personnel subsystem has the important function of matching job qualifications to people qualifications.