Exam 10: Accounting Information Systems and Internal Controls

Public Company Accounting Oversight Board (PCAOB)Auditing Standard No.5 (AS 5)encourages auditors to start from the basic/bottom of financial records to identify the key controls.

Which of the following is a computer test made to ascertain whether a given characteristic belongs to the group?

Describe the three categories of objectives and five essential components of the COSO 2.0 framework.

Given the requirement of the Sarbanes-Oxley Act of 2002 (SOX),the Public Company Accounting Oversight Board (PCAOB)established the Securities and Exchange Commission (SEC)to provide independent oversight of public accounting firms.

The overall attitude and awareness of a firm's top management and board of directors concerning the importance of internal control is often reflected in its

Management philosophy and operating style would have a relatively less significant influence on a firm's control environment when

Controls in the information technology area are classified into preventive,detective,and corrective categories.Which of the following is preventive control?

Control risk should be assessed in terms of

Processing controls are IT general controls.

Internal control is a process consisting of ongoing tasks and activities.It is a means to an end,not an end in itself.

Which of the following control activities should be taken to reduce the risk of incorrect processing in a newly installed computerized accounting system?

Obtaining an understanding of an internal control involves evaluating the design of the control and determining whether the control has been:

In a computerized environment,internal controls can be categorized as general controls and application controls.

Which internal control(s)would you recommend to prevent the following situations from occurring? a.While entering the details about a large credit sale,a clerk mistakenly typed in a nonexistent account number.Consequently,the company never received the payment from this customer. b.A customer filled in a wrong account number on the remittance advice.Consequently,a clerk entered the same number into the system,and the payment was credited to another customer's account. c.After processing a large sales transaction,the inventory records showed negative quantities on hand for several items.

The main objective of the ISO 27000 series is to provide a model for establishing,implementing,operating,monitoring,maintaining,and improving information security.

The Sarbanes-Oxley Act of 2002 (SOX)2002 requires the management of all companies and their auditors to assess and report on the design and effectiveness of internal control over financial reporting annually.

Discuss the ethical values created in Starbucks.How do they help to form the firm's control environment?