Exam 5: Internal Controls: Ensuring the Integrity of Financial Information

The Earnings Management Continuum has five levels. List, in order, the five levels of the Earnings Management Continuum and give a description of each one.

Which form must be filed quarterly by all publicly held corporations?

List and discuss three motivations for independent auditors to fairly represent the financial information of the company.

The Public Company Accounting Oversight Board

The Sarbanes-Oxley Act requires that an internal control report be included in every company's annual report. Which one of the following is NOT one of the requirements of the internal control report?

Excessive earnings management typically begins as a result of

Which of the following is true about fraudulent accounting?

Which of the following is NOT one of the major concerns most companies have when they are designing internal controls?

Which of the following audit processes attempts to identify areas that may deserve attention by using techniques such as comparative ratio analysis?

All of the following are likely to be methods that could be used to conduct fraud EXCEPT

Which of the following is a characteristic of a well-designed document?

Which one of the following errors causes net income to be overstated?

Most companies that engage in earnings management typically do NOT go beyond which of the following activities on the earnings management continuum?

A purchase of $1,600 of supplies for cash was incorrectly journalized and posted as a $1,600 debit to Supplies Expense and a $1,600 credit to cash. The entry to correct this error is

As William is preparing the end of year financial statements, he notices that the numbers required for his personal bonus have not been met. He begins to review the estimates that he has made in order to possibly adjust some numbers to meet the requirements for his bonus. This is an example of

If the total amount for Rent Expense is inadvertently posted to Prepaid Rent at the end of the year, what will be the effect on the year-end financial statements?

Which of the following categories of control activities is NOT considered a preventative control?

Which of the following groups of control activities are considered preventative controls?

Which of the following is an example of an independent check on performance?

Discuss the three types of problems that can occur in financial statements.