Question 1

COBIT (Control Objectives for Information and related Technology)is a generally accepted framework for IT governance in the U.S.

Accepted Answer

A) True 
 B)False

Question 2

A customer intended to order 100 units of a product A,but incorrectly ordered nonexistent product B. Which of the following controls most likely would detect this error?

Accepted Answer

A)  Validity check 
B)  Record count 
C)  Hash total 
D)  Parity check 
A)  Validity check 
B)  Record count 
C)  Hash total 
D)  Parity check

Question 3

Internal controls guarantee the accuracy and reliability of accounting records.

Accepted Answer

A) True 
 B)False

Question 4

An auditor assesses control risk because it

Accepted Answer

A)  is relevant to the auditor's understanding of the control environment. 
B)  provides assurance that the auditor's materiality levels are appropriate. 
C)  indicates to the auditor where inherent risk may be the greatest. 
D)  affects the level of detection risk that the auditor may accept. 
A)  is relevant to the auditor's understanding of the control environment. 
B)  provides assurance that the auditor's materiality levels are appropriate. 
C)  indicates to the auditor where inherent risk may be the greatest. 
D)  affects the level of detection risk that the auditor may accept.

Question 5

A manufacturing firm identified that it would have difficulty sourcing raw materials locally,so it decided to relocate its production facilities.According to COSO,this decision represents which of the following response to the risk?

Accepted Answer

A)  Risk reduction. 
B)  Prospect theory. 
C)  Risk sharing. 
D)  Risk acceptance. 
A)  Risk reduction. 
B)  Prospect theory. 
C)  Risk sharing. 
D)  Risk acceptance.

Question 6

Which of the following is the best way to compensate for the lack of adequate segregation of duties in a small organization?

Accepted Answer

A)  Disclosing lack of segregation of duties to external auditors during the annual review. 
B)  Replacing personnel every three or four years. 
C)  Requiring accountants to pass a yearly background check. 
D)  Allowing for greater management oversight of incompatible activities. 
A)  Disclosing lack of segregation of duties to external auditors during the annual review. 
B)  Replacing personnel every three or four years. 
C)  Requiring accountants to pass a yearly background check. 
D)  Allowing for greater management oversight of incompatible activities.

Question 7

Which of the following items is one of the eight components of COSO's enterprise risk management framework?

Accepted Answer

A)  Operations. 
B)  Reporting. 
C)  Monitoring. 
D)  Compliance. 
A)  Operations. 
B)  Reporting. 
C)  Monitoring. 
D)  Compliance.

Question 8

The framework could be used by management in its internal control assessment under requirements of SOX is the:

Accepted Answer

A)  COSO internal framework. 
B)  COSO enterprise risk management framework. 
C)  COBIT framework. 
D)  All of the above are correct. 
A)  COSO internal framework. 
B)  COSO enterprise risk management framework. 
C)  COBIT framework. 
D)  All of the above are correct.

Question 9

All of the following are examples of internal control procedures except

Accepted Answer

A)  Using pre-numbered documents 
B)  Reconciling the bank statement 
C)  Customer satisfaction surveys 
D)  Insistence that employees take vacations 
A)  Using pre-numbered documents 
B)  Reconciling the bank statement 
C)  Customer satisfaction surveys 
D)  Insistence that employees take vacations

Question 10

Which of the following represents an inherent limitation of internal controls?

Accepted Answer

A)  Bank reconciliations are not performed on a timely basis. 
B)  The CEO can request a check with no purchase order. 
C)  Customer credit check not performed. 
D)  Shipping documents are not matched to sales invoices. 
A)  Bank reconciliations are not performed on a timely basis. 
B)  The CEO can request a check with no purchase order. 
C)  Customer credit check not performed. 
D)  Shipping documents are not matched to sales invoices.

Question 11

Which of the following statement is correct regarding internal control?

Accepted Answer

A)  A well-designed internal control environment ensures the achievement of an entity's control objectives. 
B)  An inherent limitation to internal control is the fact that controls can be circumvented by management override. 
C)  A well-designed and operated internal control environment should detect collusion perpetrated by two people. 
D)  Internal control in a necessary business function and should be designed and operated to detect errors and fraud. 
A)  A well-designed internal control environment ensures the achievement of an entity's control objectives. 
B)  An inherent limitation to internal control is the fact that controls can be circumvented by management override. 
C)  A well-designed and operated internal control environment should detect collusion perpetrated by two people. 
D)  Internal control in a necessary business function and should be designed and operated to detect errors and fraud.

Question 12

Sound internal control dictates that immediately upon receiving checks from customers by mail,a responsible employee should

Accepted Answer

A)  Add the checks to the daily cash summary. 
B)  Verify that each check is supported by a pre-numbered sales invoice. 
C)  Prepare a summary listing of checks received. 
D)  Record the checks in the cash receipts journal. 
A)  Add the checks to the daily cash summary. 
B)  Verify that each check is supported by a pre-numbered sales invoice. 
C)  Prepare a summary listing of checks received. 
D)  Record the checks in the cash receipts journal.

Question 13

What are the definitions of "governance" and "management" in the COBIT 5.0 framework?

Accepted Answer

COBIT 5.0 defines "governance" as ensuri

Question 14

Tracing shipping documents to pre-numbered sales invoices provides evidence that

Accepted Answer

A)  No duplicate shipments or billings occurred. 
B)  Shipments to customers were properly invoiced. 
C)  All goods ordered by customers were shipped. 
D)  All pre-numbered sales invoices were accounted for. 
A)  No duplicate shipments or billings occurred. 
B)  Shipments to customers were properly invoiced. 
C)  All goods ordered by customers were shipped. 
D)  All pre-numbered sales invoices were accounted for.

Question 15

What is the impact of the Sarbanes-Oxley Act of 2002 (SOX)on public companies and public accounting firms?

Accepted Answer

SOX requires public companies registered

Question 16

The risk of a company's internal auditing processes failing to catch the misstated dollar amount of revenue on the company's income statement is classified as inherent risk.

Accepted Answer

A) True 
 B)False

Question 17

The Public Company Accounting Oversight Board (PCAOB)is not responsible for standards related to:

Accepted Answer

A)  Accounting practice. 
B)  Attestation. 
C)  Auditing. 
D)  Quality control over attestation and/or assurance. 
A)  Accounting practice. 
B)  Attestation. 
C)  Auditing. 
D)  Quality control over attestation and/or assurance.

Question 18

The information system of Company ABC is deemed to be 90% reliable.A major threat has been identified with an exposure of $5,000,000.Two control procedures exist to deal with the threat.Implementation of control A would cost of $140,000 and reduce the risk to 4%.Implementation of control B would cost $100,000 and reduce the risk to 6%.Implementation of both controls would cost $220,000 and reduce the risk to 2%.Given the data and based solely on an economic analysis of costs and benefits,which control procedure should you choose?
C.

Accepted Answer

Estimate value of control A: 5,000,000*(

Question 19

An entity's ongoing monitoring activities often include

Accepted Answer

A)  Periodic audits by the audit committee. 
B)  Reviewing the purchasing function. 
C)  The audit of the annual financial statements. 
D)  Control risk assessment in conjunction with quarterly reviews. 
A)  Periodic audits by the audit committee. 
B)  Reviewing the purchasing function. 
C)  The audit of the annual financial statements. 
D)  Control risk assessment in conjunction with quarterly reviews.

Question 20

According to COSO which of the following is not a component of internal control?

Accepted Answer

A)  Control risk. 
B)  Control activities. 
C)  Monitoring. 
D)  Control environment. 
A)  Control risk. 
B)  Control activities. 
C)  Monitoring. 
D)  Control environment.

COBIT (Control Objectives for Information and related Technology)is a generally accepted framework for IT governance in the U.S.

A customer intended to order 100 units of a product A,but incorrectly ordered nonexistent product B. Which of the following controls most likely would detect this error?

Internal controls guarantee the accuracy and reliability of accounting records.

An auditor assesses control risk because it

A manufacturing firm identified that it would have difficulty sourcing raw materials locally,so it decided to relocate its production facilities.According to COSO,this decision represents which of the following response to the risk?

Which of the following is the best way to compensate for the lack of adequate segregation of duties in a small organization?

Which of the following items is one of the eight components of COSO's enterprise risk management framework?

The framework could be used by management in its internal control assessment under requirements of SOX is the:

All of the following are examples of internal control procedures except

Which of the following represents an inherent limitation of internal controls?

Which of the following statement is correct regarding internal control?

Sound internal control dictates that immediately upon receiving checks from customers by mail,a responsible employee should

What are the definitions of "governance" and "management" in the COBIT 5.0 framework?

Tracing shipping documents to pre-numbered sales invoices provides evidence that

What is the impact of the Sarbanes-Oxley Act of 2002 (SOX)on public companies and public accounting firms?

The risk of a company's internal auditing processes failing to catch the misstated dollar amount of revenue on the company's income statement is classified as inherent risk.

The Public Company Accounting Oversight Board (PCAOB)is not responsible for standards related to:

An entity's ongoing monitoring activities often include

According to COSO which of the following is not a component of internal control?

Accounting Information Systems and Firm Value

Accountants As Business Analysts

Data Modeling

Relational Databases and Enterprise Systems

Sales and Collections Business Process

Purchases and Payments Business Process

Conversion Business Process

Reporting Processes and Extensible Business Reporting Language XBRL

Information Security and Computer Fraud

Monitoring and Auditing AIS

The Balanced Scorecard and Business Value of Information Technology

Evaluating AIS Investments

The Systems Development Life Cycle and Project Management: Addressing the Challenges of Building Ais Systems

Filters

Exam 10: Accounting Information Systems and Internal Controls

COBIT (Control Objectives for Information and related Technology)is a generally accepted framework for IT governance in the U.S.

A customer intended to order 100 units of a product A,but incorrectly ordered nonexistent product B. Which of the following controls most likely would detect this error?

Internal controls guarantee the accuracy and reliability of accounting records.

An auditor assesses control risk because it

A manufacturing firm identified that it would have difficulty sourcing raw materials locally,so it decided to relocate its production facilities.According to COSO,this decision represents which of the following response to the risk?

Which of the following is the best way to compensate for the lack of adequate segregation of duties in a small organization?

Which of the following items is one of the eight components of COSO's enterprise risk management framework?

The framework could be used by management in its internal control assessment under requirements of SOX is the:

All of the following are examples of internal control procedures except

Which of the following represents an inherent limitation of internal controls?

Which of the following statement is correct regarding internal control?

Sound internal control dictates that immediately upon receiving checks from customers by mail,a responsible employee should

What are the definitions of "governance" and "management" in the COBIT 5.0 framework?

Tracing shipping documents to pre-numbered sales invoices provides evidence that

What is the impact of the Sarbanes-Oxley Act of 2002 (SOX)on public companies and public accounting firms?

The risk of a company's internal auditing processes failing to catch the misstated dollar amount of revenue on the company's income statement is classified as inherent risk.

The Public Company Accounting Oversight Board (PCAOB)is not responsible for standards related to:

An entity's ongoing monitoring activities often include

According to COSO which of the following is not a component of internal control?

Accounting Information Systems and Firm Value

Accountants As Business Analysts

Data Modeling

Relational Databases and Enterprise Systems

Sales and Collections Business Process

Purchases and Payments Business Process

Conversion Business Process

Reporting Processes and Extensible Business Reporting Language XBRL

Information Security and Computer Fraud

Monitoring and Auditing AIS

The Balanced Scorecard and Business Value of Information Technology

Evaluating AIS Investments

The Systems Development Life Cycle and Project Management: Addressing the Challenges of Building Ais Systems

Filters