Question 1

One of the objectives of the segregation of duties is to

Accepted Answer

A)  make sure that different people handle different parts of the same transaction. 
B)  ensure that no collusion will occur. 
C)  make sure that different people handle different transactions. 
D)  achieve an optimal division of labor for efficient operations. 
A)  make sure that different people handle different parts of the same transaction. 
B)  ensure that no collusion will occur. 
C)  make sure that different people handle different transactions. 
D)  achieve an optimal division of labor for efficient operations. A

Question 2

What is not a corrective control procedure?

Accepted Answer

A)  Identify the cause of a problem. 
B)  Deter problems before they arise. 
C)  Correct resulting errors or difficulties. 
D)  Modify the system so that future problems are minimized or eliminated. 
A)  Identify the cause of a problem. 
B)  Deter problems before they arise. 
C)  Correct resulting errors or difficulties. 
D)  Modify the system so that future problems are minimized or eliminated. B

Question 3

The process that a business uses to safeguard assets,provide accurate and reliable information,and promote and improve operational efficiency is known as

Accepted Answer

A)  a phenomenon. 
B)  internal control. 
C)  an AIS threat. 
D)  a preventive control. 
A)  a phenomenon. 
B)  internal control. 
C)  an AIS threat. 
D)  a preventive control. B

Question 4

Go-Go Corporation,a publicly traded company,has three brothers who serve as President,Vice President of Finance and CEO.This situation

Accepted Answer

A)  increases the risk associated with an audit. 
B)  must be changed before your audit firm could accept the audit engagement. 
C)  is a violation of the Sarbanes-Oxley Act. 
D)  violates the Securities and Exchange Act. 
A)  increases the risk associated with an audit. 
B)  must be changed before your audit firm could accept the audit engagement. 
C)  is a violation of the Sarbanes-Oxley Act. 
D)  violates the Securities and Exchange Act.

Question 5

A(n)________ helps employees act ethically by setting limits beyond which an employee must not pass.

Accepted Answer

A)  boundary system 
B)  diagnostic control system 
C)  interactive control system 
D)  internal control system 
A)  boundary system 
B)  diagnostic control system 
C)  interactive control system 
D)  internal control system

Question 6

Personnel policies such as background checks,mandatory vacations,and rotation of duties tend to deter

Accepted Answer

A)  unintentional errors. 
B)  employee fraud or embezzlement. 
C)  fraud by outsiders. 
D)  disgruntled employees. 
A)  unintentional errors. 
B)  employee fraud or embezzlement. 
C)  fraud by outsiders. 
D)  disgruntled employees.

Question 7

Chuck Hewitt was relaxing after work with a colleague at a local watering hole.Well into his second martini,he began expressing his opinions about his work environment.It seems that,as a result of "feminazi" interference,the suggestive banter that had been prevalent in the workplace during his youth was no longer acceptable.He even had to sit through a sexual harassment workshop! The level of control that the company is using in this case is a

Accepted Answer

A)  boundary system. 
B)  belief system. 
C)  interactive control system. 
D)  diagnostic control system. 
A)  boundary system. 
B)  belief system. 
C)  interactive control system. 
D)  diagnostic control system.

Question 8

The Director of Information Technology for the city of Bumpkiss,Minnesota,formed a company to sell computer supplies and software.All purchases made on behalf of the City were made from his company.He was later charged with fraud for overcharging the City,but was not convicted.The control issue in this case arose because the Director had both ________ and ________ duties.

Accepted Answer

A)  custody; authorization 
B)  custody; recording 
C)  recording; authorization 
D)  management; custody 
A)  custody; authorization 
B)  custody; recording 
C)  recording; authorization 
D)  management; custody

Question 9

The risk that exists before management takes any steps to control the likelihood or impact of a risk is

Accepted Answer

A)  Inherent risk 
B)  Residual risk 
C)  Risk appetite 
D)  Risk assessment 
A)  Inherent risk 
B)  Residual risk 
C)  Risk appetite 
D)  Risk assessment

Question 10

The organization chart for Geerts Corporation includes a controller and an information processing manager,both of whom report to the vice president of finance.Which of the following would be a control weakness?

Accepted Answer

A)  Assigning the programming and operating of the computer system to an independent control group which reports to the controller 
B)  Providing for maintenance of input data controls by an independent control group which reports to the controller 
C)  Periodically rotating assignment of application processing among machine operators, who all report to the information processing manager 
D)  Providing for review and distribution of system-generated reports by an independent control group which reports to the controller 
A)  Assigning the programming and operating of the computer system to an independent control group which reports to the controller 
B)  Providing for maintenance of input data controls by an independent control group which reports to the controller 
C)  Periodically rotating assignment of application processing among machine operators, who all report to the information processing manager 
D)  Providing for review and distribution of system-generated reports by an independent control group which reports to the controller

Question 11

This control framework's intent includes helping the organization to provide reasonable assurance that objectives are achieved and problems are minimized,and to avoid adverse publicity and damage to the organization's reputation.

Accepted Answer

A)  ISACA's control objectives for information and related technology 
B)  COSO's internal control framework 
C)  COSO's enterprise risk management framework 
D)  none of the above 
A)  ISACA's control objectives for information and related technology 
B)  COSO's internal control framework 
C)  COSO's enterprise risk management framework 
D)  none of the above

Question 12

The audit committee of the board of directors

Accepted Answer

A)  is usually chaired by the CFO. 
B)  conducts testing of controls on behalf of the external auditors. 
C)  provides a check and balance on management. 
D)  does all of the above. 
A)  is usually chaired by the CFO. 
B)  conducts testing of controls on behalf of the external auditors. 
C)  provides a check and balance on management. 
D)  does all of the above.

Question 13

River Rafting Adventures of Iowa provides rafts and tour guides to tourists eager to ride the wild rivers of Iowa.Management has determined that there is one chance in a thousand of a client being injured or killed.Settlement of resulting lawsuits has an average cost of $650,000.Insurance with a $50,000 deductible is available.It covers the costs of lawsuits,unless there is evidence of criminal negligence.What is the expected loss without insurance?

Accepted Answer

A)  $50,000 
B)  $650,000 
C)  $650 
D)  $50 
A)  $50,000 
B)  $650,000 
C)  $650 
D)  $50

Question 14

River Rafting Adventures of Iowa provides rafts and tour guides to tourists eager to ride the wild rivers of Iowa.Management has determined that there is one chance in a thousand of a client being injured or killed.Settlement of resulting lawsuits have an average cost of $650,000.Insurance with a $50,000 deductible is available.It covers the costs of lawsuits,unless there is evidence of criminal negligence.Based on cost-benefit analysis,what is the most that the business should pay for the insurance?

Accepted Answer

A)  $500 
B)  $650 
C)  $600 
D)  $50 
A)  $500 
B)  $650 
C)  $600 
D)  $50

Question 15

Classify each of the following controls as preventive,detective,or corrective.
Periodic bank reconciliation
Separation of cash and accounting records
Maintaining backup copies of master and transaction files
Pre-numbering of sales invoices
Chart of accounts
Retina scan before entering a sensitive R & D facility
Resubmission of error transactions for subsequent processing
Internal auditor rechecking the debits and credits on the payment voucher
Depositing all cash receipts intact
Hiring qualified accounting personnel

Accepted Answer

Detective.Preventive.Correctiv

Question 16

Change management refers to

Accepted Answer

A)  disbursement controls on petty cash. 
B)  operational controls applied to companies after mergers or acquisitions. 
C)  replacement of upper management and their introduction to the organization. 
D)  controls designed to ensure that updates in information technology do not have negative consequences. 
A)  disbursement controls on petty cash. 
B)  operational controls applied to companies after mergers or acquisitions. 
C)  replacement of upper management and their introduction to the organization. 
D)  controls designed to ensure that updates in information technology do not have negative consequences.

Question 17

Internal control is often referred to as a(n)________,because it permeates an organization's operating activities and is an integral part of management activities.

Accepted Answer

A)  event 
B)  activity 
C)  process 
D)  system 
A)  event 
B)  activity 
C)  process 
D)  system

Question 18

A computer operator is allowed to work as a programmer on a new payroll software project.Does this create a potential internal control problem?

Accepted Answer

A)  Yes, the computer operator could alter the payroll program to increase her salary. 
B)  Yes, this is a potential problem unless the computer operator is supervised by the payroll manager. 
C)  No, ideal segregation of duties is not usually possible, and operators are often the best at programming changes and updates. 
D)  No, as long as the computer operator separately accounts for hours worked in programming and in operations. 
A)  Yes, the computer operator could alter the payroll program to increase her salary. 
B)  Yes, this is a potential problem unless the computer operator is supervised by the payroll manager. 
C)  No, ideal segregation of duties is not usually possible, and operators are often the best at programming changes and updates. 
D)  No, as long as the computer operator separately accounts for hours worked in programming and in operations.

Question 19

With a limited work force and a desire to maintain strong internal control,which combination of duties would result in the lowest risk exposure?

Accepted Answer

A)  Updating the inventory subsidiary ledgers and recording purchases in the purchases journal 
B)  Approving a sales return on a customer's account and depositing customers' checks in the bank 
C)  Updating the general ledger and working in the inventory warehouse 
D)  Entering payments to vendors in the cash disbursements journal and entering cash received from customers in the cash receipts journal 
A)  Updating the inventory subsidiary ledgers and recording purchases in the purchases journal 
B)  Approving a sales return on a customer's account and depositing customers' checks in the bank 
C)  Updating the general ledger and working in the inventory warehouse 
D)  Entering payments to vendors in the cash disbursements journal and entering cash received from customers in the cash receipts journal

Question 20

Describe the differences between general and specific authorization.

Accepted Answer

Authorizations are often documented by s

One of the objectives of the segregation of duties is to

What is not a corrective control procedure?

The process that a business uses to safeguard assets,provide accurate and reliable information,and promote and improve operational efficiency is known as

Go-Go Corporation,a publicly traded company,has three brothers who serve as President,Vice President of Finance and CEO.This situation

A(n)________ helps employees act ethically by setting limits beyond which an employee must not pass.

Personnel policies such as background checks,mandatory vacations,and rotation of duties tend to deter

The risk that exists before management takes any steps to control the likelihood or impact of a risk is

The organization chart for Geerts Corporation includes a controller and an information processing manager,both of whom report to the vice president of finance.Which of the following would be a control weakness?

This control framework's intent includes helping the organization to provide reasonable assurance that objectives are achieved and problems are minimized,and to avoid adverse publicity and damage to the organization's reputation.

The audit committee of the board of directors

Change management refers to

Internal control is often referred to as a(n)________,because it permeates an organization's operating activities and is an integral part of management activities.

A computer operator is allowed to work as a programmer on a new payroll software project.Does this create a potential internal control problem?

With a limited work force and a desire to maintain strong internal control,which combination of duties would result in the lowest risk exposure?

Describe the differences between general and specific authorization.

Accounting Information Systems: an Overview

Overview of Transaction Processing and Erp Systems

Systems Documentation Techniques

Relational Databases

Computer Fraud

Computer Fraud and Abuse Techniques

Information Systems Controls for System Reliability Part 1: Information Security

Information Systems Controls for Systems Reliability Part 2: Confidentiality and Privacy

Information Systems Controls for Systems Reliability Part 3: Processing Integrity and Availability

Auditing Computer-Based Information Systems

The Revenue Cycle: Sales to Cash Collections

The Expenditure Cycle: Purchasing to Cash Disbursements

The Production Cycle

The Human Resources Management and Payroll Cycle

General Ledger and Reporting System

The Rea Data Model

Implementing an Rea Model in a Relational Database

Special Topics in Rea Modeling

Introduction to Systems Development Systems Analysis

Ais Development Strategies

Systems Design, implementation, and Operation

Filters

Exam 7: Control and Accounting Information Systems

One of the objectives of the segregation of duties is to

What is not a corrective control procedure?

The process that a business uses to safeguard assets,provide accurate and reliable information,and promote and improve operational efficiency is known as

Go-Go Corporation,a publicly traded company,has three brothers who serve as President,Vice President of Finance and CEO.This situation

A(n)________ helps employees act ethically by setting limits beyond which an employee must not pass.

Personnel policies such as background checks,mandatory vacations,and rotation of duties tend to deter

The risk that exists before management takes any steps to control the likelihood or impact of a risk is

The organization chart for Geerts Corporation includes a controller and an information processing manager,both of whom report to the vice president of finance.Which of the following would be a control weakness?

This control framework's intent includes helping the organization to provide reasonable assurance that objectives are achieved and problems are minimized,and to avoid adverse publicity and damage to the organization's reputation.

The audit committee of the board of directors

Change management refers to

Internal control is often referred to as a(n)________,because it permeates an organization's operating activities and is an integral part of management activities.

A computer operator is allowed to work as a programmer on a new payroll software project.Does this create a potential internal control problem?

With a limited work force and a desire to maintain strong internal control,which combination of duties would result in the lowest risk exposure?

Describe the differences between general and specific authorization.

Accounting Information Systems: an Overview

Overview of Transaction Processing and Erp Systems

Systems Documentation Techniques

Relational Databases

Computer Fraud

Computer Fraud and Abuse Techniques

Information Systems Controls for System Reliability Part 1: Information Security

Information Systems Controls for Systems Reliability Part 2: Confidentiality and Privacy

Information Systems Controls for Systems Reliability Part 3: Processing Integrity and Availability

Auditing Computer-Based Information Systems

The Revenue Cycle: Sales to Cash Collections

The Expenditure Cycle: Purchasing to Cash Disbursements

The Production Cycle

The Human Resources Management and Payroll Cycle

General Ledger and Reporting System

The Rea Data Model

Implementing an Rea Model in a Relational Database

Special Topics in Rea Modeling

Introduction to Systems Development Systems Analysis

Ais Development Strategies

Systems Design, implementation, and Operation

Filters