Question 1

Which of the following would be considered a part of control activities in an internal control system?

Accepted Answer

A) Having large quantities of cash on hand 
B) Separation of duties 
C) Having a leadership philosophy 
D) Locating weaknesses in an internal control system 
A) Having large quantities of cash on hand 
B) Separation of duties 
C) Having a leadership philosophy 
D) Locating weaknesses in an internal control system

Question 2

Audits confirm the validity and reliability of accounting information.

Accepted Answer

A) True 
 B)False

Question 3

Committing a fraud because of easy access to a company's assets is an example of:

Accepted Answer

A) realization. 
B) perceived opportunity. 
C) rationalization. 
D) perceived pressure. 
A) realization. 
B) perceived opportunity. 
C) rationalization. 
D) perceived pressure.

Question 4

Under SOX, the external auditors must now report to:

Accepted Answer

A) the management of the company being audited. 
B) an audit committee. 
C) the Securities and Exchange Commission. 
D) the Public Company Accounting Oversight Board. 
A) the management of the company being audited. 
B) an audit committee. 
C) the Securities and Exchange Commission. 
D) the Public Company Accounting Oversight Board.

Question 5

Finding good reasons for doing things that we REALLY know are wrong is an example of:

Accepted Answer

A) realization. 
B) perceived opportunity. 
C) rationalization. 
D) perceived pressure. 
A) realization. 
B) perceived opportunity. 
C) rationalization. 
D) perceived pressure.

Question 6

Larry is concerned that the company won't meet expected earnings, so he overstates revenues, telling himself "it's for a good reason!" This is an example of, respectively:

Accepted Answer

A) perceived pressure, rationalization. 
B) perceived opportunity, rationalization. 
C) rationalization, perceived pressure. 
D) perceived opportunity, perceived pressure. 
A) perceived pressure, rationalization. 
B) perceived opportunity, rationalization. 
C) rationalization, perceived pressure. 
D) perceived opportunity, perceived pressure.

Question 7

A properly designed internal control system can guarantee that fraud will not occur.

Accepted Answer

A) True 
 B)False

Question 8

The Public Company Accounting Oversight Board (PCAOB)reports to the SOX.

Accepted Answer

A) True 
 B)False

Question 9

Under US GAAP and IFRS, research and development costs are: 
I. Research costs are expensed as incurred
II. Development costs are expensed as incurred
III. Research costs are capitalized and amortized over time
IV. Development costs are capitalized and amortized over time.

Accepted Answer

A) GAAP I and II; IFRS II and III 
B) GAAP I and IV; IFRS III and IV 
C) GAAP I and II; IFRS I and IV 
D) GAAP II and III; IFRS II and III 
A) GAAP I and II; IFRS II and III 
B) GAAP I and IV; IFRS III and IV 
C) GAAP I and II; IFRS I and IV 
D) GAAP II and III; IFRS II and III

Question 10

The Sarbanes-Oxley act applies to:

Accepted Answer

A) all corporations. 
B) all partnerships. 
C) all publicly traded companies. 
D) international companies doing business in the United States. 
A) all corporations. 
B) all partnerships. 
C) all publicly traded companies. 
D) international companies doing business in the United States.

Question 11

The audit opinion issued when the financial statements are fairly presented without exception is the:

Accepted Answer

A) disclaimer of opinion. 
B) qualified opinion. 
C) adverse opinion. 
D) unqualified opinion. 
A) disclaimer of opinion. 
B) qualified opinion. 
C) adverse opinion. 
D) unqualified opinion.

Question 12

Kat Neese is an accountant at S&C Co. She suspects that her boss is making illegal adjustments to the accounting records after she gives them to him. If Kat doesn't say anything or report her suspicions, she has:

Accepted Answer

A) committed a crime. 
B) protected the company from a lawsuit. 
C) protected the stockholders. 
D) committed an unethical act. 
A) committed a crime. 
B) protected the company from a lawsuit. 
C) protected the stockholders. 
D) committed an unethical act.

Question 13

Which element of internal control deals with the oversight of the internal control system?

Accepted Answer

A) Monitoring 
B) Control environment 
C) Information and communication 
D) Risk assessment 
A) Monitoring 
B) Control environment 
C) Information and communication 
D) Risk assessment

Question 14

The primary form of fraud committed against an organization is usually done by:

Accepted Answer

A) management. 
B) employees. 
C) stockholders. 
D) boards of directors. 
A) management. 
B) employees. 
C) stockholders. 
D) boards of directors.

Question 15

Having security measures, proper authorization channels, and restricted access to assets is an example of what element of internal control?

Accepted Answer

A) Control environment 
B) Control activities 
C) Information and communication 
D) Risk assessment 
A) Control environment 
B) Control activities 
C) Information and communication 
D) Risk assessment

Question 16

A company may be limited in their internal control procedures because the cost of hiring enough people to implement the procedures:

Accepted Answer

A) outweighs the benefits of the system. 
B) has nothing to do with the effectiveness of the internal control system. 
C) can prevent collusion. 
D) can limit employee distractions. 
A) outweighs the benefits of the system. 
B) has nothing to do with the effectiveness of the internal control system. 
C) can prevent collusion. 
D) can limit employee distractions.

Question 17

Attempting to justify your actions is an example of:

Accepted Answer

A) realization. 
B) perceived opportunity. 
C) rationalization. 
D) perceived pressure. 
A) realization. 
B) perceived opportunity. 
C) rationalization. 
D) perceived pressure.

Question 18

The Fraud Triangle is used to show the connection of the factors necessary to commit fraud by or against an organization.

Accepted Answer

A) True 
 B)False

Question 19

Many states require CPAs to participate in continuing education that deals with ethics.

Accepted Answer

A) True 
 B)False

Question 20

Recording assets that the company does NOT possess is an example of:

Accepted Answer

A) management fraud. 
B) employee fraud. 
C) collusion. 
D) embezzlement. 
A) management fraud. 
B) employee fraud. 
C) collusion. 
D) embezzlement.

Which of the following would be considered a part of control activities in an internal control system?

Audits confirm the validity and reliability of accounting information.

Committing a fraud because of easy access to a company's assets is an example of:

Under SOX, the external auditors must now report to:

Finding good reasons for doing things that we REALLY know are wrong is an example of:

Larry is concerned that the company won't meet expected earnings, so he overstates revenues, telling himself "it's for a good reason!" This is an example of, respectively:

A properly designed internal control system can guarantee that fraud will not occur.

The Public Company Accounting Oversight Board (PCAOB)reports to the SOX.

Under US GAAP and IFRS, research and development costs are: I. Research costs are expensed as incurred II. Development costs are expensed as incurred III. Research costs are capitalized and amortized over time IV. Development costs are capitalized and amortized over time.

The Sarbanes-Oxley act applies to:

The audit opinion issued when the financial statements are fairly presented without exception is the:

Kat Neese is an accountant at S&C Co. She suspects that her boss is making illegal adjustments to the accounting records after she gives them to him. If Kat doesn't say anything or report her suspicions, she has:

Which element of internal control deals with the oversight of the internal control system?

The primary form of fraud committed against an organization is usually done by:

Having security measures, proper authorization channels, and restricted access to assets is an example of what element of internal control?

A company may be limited in their internal control procedures because the cost of hiring enough people to implement the procedures:

Attempting to justify your actions is an example of:

The Fraud Triangle is used to show the connection of the factors necessary to commit fraud by or against an organization.

Many states require CPAs to participate in continuing education that deals with ethics.

Recording assets that the company does NOT possess is an example of:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

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Exam 6: The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Which of the following would be considered a part of control activities in an internal control system?

Audits confirm the validity and reliability of accounting information.

Committing a fraud because of easy access to a company's assets is an example of:

Under SOX, the external auditors must now report to:

Finding good reasons for doing things that we REALLY know are wrong is an example of:

Larry is concerned that the company won't meet expected earnings, so he overstates revenues, telling himself "it's for a good reason!" This is an example of, respectively:

A properly designed internal control system can guarantee that fraud will not occur.

The Public Company Accounting Oversight Board (PCAOB)reports to the SOX.

Under US GAAP and IFRS, research and development costs are: I. Research costs are expensed as incurred II. Development costs are expensed as incurred III. Research costs are capitalized and amortized over time IV. Development costs are capitalized and amortized over time.

The Sarbanes-Oxley act applies to:

The audit opinion issued when the financial statements are fairly presented without exception is the:

Kat Neese is an accountant at S&C Co. She suspects that her boss is making illegal adjustments to the accounting records after she gives them to him. If Kat doesn't say anything or report her suspicions, she has:

Which element of internal control deals with the oversight of the internal control system?

The primary form of fraud committed against an organization is usually done by:

Having security measures, proper authorization channels, and restricted access to assets is an example of what element of internal control?

A company may be limited in their internal control procedures because the cost of hiring enough people to implement the procedures:

Attempting to justify your actions is an example of:

The Fraud Triangle is used to show the connection of the factors necessary to commit fraud by or against an organization.

Many states require CPAs to participate in continuing education that deals with ethics.

Recording assets that the company does NOT possess is an example of:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters