Question 1

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 2

In response to the need for internal controls above and beyond what was described by COSO, the Information Systems Audit and Control Association developed an extensive framework of IT controls entitled:

Accepted Answer

A) Trust Principles 
B) Control Objectives for Information Technology (COBIT) 
C) Control Instrument for Certified Accountants (CIC
A)  
D) American Internal Control Practice Association (AICP
A)  
A) Trust Principles 
B) Control Objectives for Information Technology (COBIT) 
C) Control Instrument for Certified Accountants (CIC
A)  
D) American Internal Control Practice Association (AICP
A)

Question 3

The definition of fraud includes the theft of:

Accepted Answer

A) Assets 
B) Money 
C) Information 
D) All of the above 
A) Assets 
B) Money 
C) Information 
D) All of the above

Question 4

A situation where the organization's cash is stolen before it is entered in the accounting records is termed:

Accepted Answer

A) Kickback 
B) Larceny 
C) Collusion 
D) Skimming 
A) Kickback 
B) Larceny 
C) Collusion 
D) Skimming

Question 5

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 6

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 7

The careful and responsible oversight and use of the assets entrusted to management is called:

Accepted Answer

A) Control environment 
B) Stewardship 
C) Preventive control 
D) Security 
A) Control environment 
B) Stewardship 
C) Preventive control 
D) Security

Question 8

The falsification of accounting reports is referred to as:

Accepted Answer

A) Defalcation 
B) Internal Theft 
C) Misappropriation of Assets 
D) Earnings Management 
A) Defalcation 
B) Internal Theft 
C) Misappropriation of Assets 
D) Earnings Management

Question 9

Proper segregation of functional responsibilities calls for separation of the functions of:

Accepted Answer

A) Authorization, execution, and payment 
B) Authorization, recording, and custody 
C) Custody, execution, and reporting 
D) Authorization, payment, and recording 
A) Authorization, execution, and payment 
B) Authorization, recording, and custody 
C) Custody, execution, and reporting 
D) Authorization, payment, and recording

Question 10

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 11

In addition to ethical practices, management has an obligation to maintain a set of processes and procedures to assure accurate financial reporting and protection of company assets.This obligation arises because:

Accepted Answer

A) Many groups have expectations of management. 
B) Management has a stewardship obligation to investors. 
C) Management has an obligation to provide accurate reports to non-investors. 
D) All of the above are reasons for the obligation. 
A) Many groups have expectations of management. 
B) Management has a stewardship obligation to investors. 
C) Management has an obligation to provide accurate reports to non-investors. 
D) All of the above are reasons for the obligation.

Question 12

The component of internal control, identified in the COSO report, that sets the tone of an organization and includes the consciousness of its employees is:

Accepted Answer

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

Question 13

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 14

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 15

This activity serves as a method to confirm the accuracy and completeness of data in the accounting system:

Accepted Answer

A) Compensating control 
B) Independent checks 
C) Audit trail 
D) Supporting documentation 
A) Compensating control 
B) Independent checks 
C) Audit trail 
D) Supporting documentation

Question 16

A situation where the organization's cash is stolen after it is entered in the accounting records is termed:

Accepted Answer

A) Kickback 
B) Larceny 
C) Collusion 
D) Skimming 
A) Kickback 
B) Larceny 
C) Collusion 
D) Skimming

Question 17

A cash payment made by a vendor to an organization's employee in exchange for a sale to the organization by the vendor is termed:

Accepted Answer

A) Bribery 
B) Collusion 
C) Kickback 
D) Payment Fraud 
A) Bribery 
B) Collusion 
C) Kickback 
D) Payment Fraud

Question 18

The main risk related to this category of Trust Services Principles is unauthorized access.

Accepted Answer

A) Online privacy 
B) Confidentiality 
C) Processing integrity 
D) Security 
A) Online privacy 
B) Confidentiality 
C) Processing integrity 
D) Security

Question 19

Changing the accounting records to hide the existence of a fraud is termed:

Accepted Answer

A) Theft 
B) Conversion 
C) Collusion 
D) Concealment 
A) Theft 
B) Conversion 
C) Collusion 
D) Concealment

Question 20

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 board of directors demonstrates independence from management and exercises oversight of internal controls. 
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 board of directors demonstrates independence from management and exercises oversight of internal controls.

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

In response to the need for internal controls above and beyond what was described by COSO, the Information Systems Audit and Control Association developed an extensive framework of IT controls entitled:

The definition of fraud includes the theft of:

A situation where the organization's cash is stolen before it is entered in the accounting records is termed:

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.

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

The careful and responsible oversight and use of the assets entrusted to management is called:

The falsification of accounting reports is referred to as:

Proper segregation of functional responsibilities calls for separation of the functions of:

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

In addition to ethical practices, management has an obligation to maintain a set of processes and procedures to assure accurate financial reporting and protection of company assets.This obligation arises because:

The component of internal control, identified in the COSO report, that sets the tone of an organization and includes the consciousness of its employees is:

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

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

This activity serves as a method to confirm the accuracy and completeness of data in the accounting system:

A situation where the organization's cash is stolen after it is entered in the accounting records is termed:

A cash payment made by a vendor to an organization's employee in exchange for a sale to the organization by the vendor is termed:

The main risk related to this category of Trust Services Principles is unauthorized access.

Changing the accounting records to hide the existence of a fraud is termed:

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?

Introduction to AIS

Foundational Concepts of the AIS

Internal Controls and Risks in IT Systems

IT Governance

Enterprise Resource Planning ERP Systems

Auditing Information Technology-Based Processes

Revenue and Cash Collection Processes and Controls

Expenditures Processes and Controlspurchases

Expenditures Processes and Controlspayroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

E-Commerce and E-Business

Filters

Exam 3: Fraud, Ethics, and Internal Control

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

In response to the need for internal controls above and beyond what was described by COSO, the Information Systems Audit and Control Association developed an extensive framework of IT controls entitled:

The definition of fraud includes the theft of:

A situation where the organization's cash is stolen before it is entered in the accounting records is termed:

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.

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

The careful and responsible oversight and use of the assets entrusted to management is called:

The falsification of accounting reports is referred to as:

Proper segregation of functional responsibilities calls for separation of the functions of:

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

In addition to ethical practices, management has an obligation to maintain a set of processes and procedures to assure accurate financial reporting and protection of company assets.This obligation arises because:

The component of internal control, identified in the COSO report, that sets the tone of an organization and includes the consciousness of its employees is:

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

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

This activity serves as a method to confirm the accuracy and completeness of data in the accounting system:

A situation where the organization's cash is stolen after it is entered in the accounting records is termed:

A cash payment made by a vendor to an organization's employee in exchange for a sale to the organization by the vendor is termed:

The main risk related to this category of Trust Services Principles is unauthorized access.

Changing the accounting records to hide the existence of a fraud is termed:

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?

Introduction to AIS

Foundational Concepts of the AIS

Internal Controls and Risks in IT Systems

IT Governance

Enterprise Resource Planning ERP Systems

Auditing Information Technology-Based Processes

Revenue and Cash Collection Processes and Controls

Expenditures Processes and Controlspurchases

Expenditures Processes and Controlspayroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

E-Commerce and E-Business

Filters