Question 1

Explain why management's philosophy and operating style are considered to be the most important element of the internal environment.

Accepted Answer

Management truly sets the tone for the c

Question 2

Which of the following statements about internal environment is false?

Accepted Answer

A)  Management's attitudes toward internal control and ethical behavior have only minimal impact on employee beliefs or actions. 
B)  Supervision is especially important in organizations that cannot afford elaborate responsibility reporting or are too small to have adequate segregation of duties. 
C)  An overly complex or unclear organizational structure may be indicative of more serious problems. 
D)  A written policy and procedures manual is an important tool for assigning authority and responsibility. 
A)  Management's attitudes toward internal control and ethical behavior have only minimal impact on employee beliefs or actions. 
B)  Supervision is especially important in organizations that cannot afford elaborate responsibility reporting or are too small to have adequate segregation of duties. 
C)  An overly complex or unclear organizational structure may be indicative of more serious problems. 
D)  A written policy and procedures manual is an important tool for assigning authority and responsibility.

Question 3

According to the ERM,these help the company address all applicable laws and regulations.

Accepted Answer

A)  Compliance objectives 
B)  Operations objectives 
C)  Reporting objectives 
D)  Strategic objectives 
A)  Compliance objectives 
B)  Operations objectives 
C)  Reporting objectives 
D)  Strategic objectives

Question 4

According to the ERM,high level goals that are aligned with and support the company's mission are

Accepted Answer

A)  compliance objectives. 
B)  operations objectives. 
C)  reporting objectives. 
D)  strategic objectives. 
A)  compliance objectives. 
B)  operations objectives. 
C)  reporting objectives. 
D)  strategic objectives.

Question 5

The amount of risk a company is willing to accept in order to achieve its goals and objectives 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 6

The COSO Enterprise Risk Management Framework includes eight components.Which of the following is not one of them?

Accepted Answer

A)  control environment 
B)  risk assessment 
C)  compliance with federal, state, or local laws 
D)  monitoring 
A)  control environment 
B)  risk assessment 
C)  compliance with federal, state, or local laws 
D)  monitoring

Question 7

When undertaking risk assessment,the expected loss is calculated like this.

Accepted Answer

A)  Impact times expected loss 
B)  Impact times likelihood 
C)  Inherent risk times likelihood 
D)  Residual risk times likelihood 
A)  Impact times expected loss 
B)  Impact times likelihood 
C)  Inherent risk times likelihood 
D)  Residual risk times likelihood

Question 8

Store policy that allows retail clerks to process sales returns for $300 or less,with a receipt dated within the past 60 days,is an example of

Accepted Answer

A)  general authorization. 
B)  specific authorization. 
C)  special authorization. 
D)  generic authorization. 
A)  general authorization. 
B)  specific authorization. 
C)  special authorization. 
D)  generic authorization.

Question 9

A(n)________ helps top-level managers with high-level activities that demand frequent and regular attention.

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 10

The SEC and FASB are best described as external influences that directly affect an organization's

Accepted Answer

A)  hiring practices. 
B)  philosophy and operating style. 
C)  internal environment. 
D)  methods of assigning authority. 
A)  hiring practices. 
B)  philosophy and operating style. 
C)  internal environment. 
D)  methods of assigning authority.

Question 11

Which of the following is an example of a preventive control?

Accepted Answer

A)  approving customer credit prior to approving a sales order 
B)  reconciling the bank statement to the cash control account 
C)  counting inventory on hand and comparing counts to the perpetual inventory records 
D)  maintaining frequent backup records to prevent loss of data 
A)  approving customer credit prior to approving a sales order 
B)  reconciling the bank statement to the cash control account 
C)  counting inventory on hand and comparing counts to the perpetual inventory records 
D)  maintaining frequent backup records to prevent loss of data

Question 12

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 with insurance?

Accepted Answer

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

Question 13

Which component of the COSO Enterprise Risk Management Integrated Framework is concerned with understanding how transactions are initiated,data are captured and processed,and information is reported?

Accepted Answer

A)  Information and communication 
B)  Internal environment 
C)  Event identification 
D)  Objective setting 
A)  Information and communication 
B)  Internal environment 
C)  Event identification 
D)  Objective setting

Question 14

Which of the following duties could be performed by the same individual without violating segregation of duties controls?

Accepted Answer

A)  Approving accounting software change requests and testing production scheduling software changes 
B)  Programming new code for accounting software and testing accounting software upgrades 
C)  Approving software changes and implementing the upgraded software 
D)  Managing accounts payable function and revising code for accounting software to more efficiently process discount due dates on vendor invoices 
A)  Approving accounting software change requests and testing production scheduling software changes 
B)  Programming new code for accounting software and testing accounting software upgrades 
C)  Approving software changes and implementing the upgraded software 
D)  Managing accounts payable function and revising code for accounting software to more efficiently process discount due dates on vendor invoices

Question 15

Due to data errors occurring from time to time in processing the Albert Company's payroll,the company's management is considering the addition of a data validation control procedure that is projected to reduce the risk of these data errors from 13% to 2%.The cost of the payroll reprocessing is estimated to be $11,000.The cost of implementing the data validation control procedure is expected to be $700.Which of the following statements is true?

Accepted Answer

A)  The data validation control procedure should be implemented because its net estimated benefit is $510. 
B)  The data validation control procedure should be implemented because its cost of $700 is less than the payroll reprocessing cost of $1,430. 
C)  The data validation control procedure should not be implemented because its cost of $700 exceeds the expected benefit by $480. 
D)  The data validation control procedure should not be implemented because its net estimated benefit is a negative $1,210. 
A)  The data validation control procedure should be implemented because its net estimated benefit is $510. 
B)  The data validation control procedure should be implemented because its cost of $700 is less than the payroll reprocessing cost of $1,430. 
C)  The data validation control procedure should not be implemented because its cost of $700 exceeds the expected benefit by $480. 
D)  The data validation control procedure should not be implemented because its net estimated benefit is a negative $1,210.

Question 16

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 impact of this risk without insurance?

Accepted Answer

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

Explain why management's philosophy and operating style are considered to be the most important element of the internal environment.

Which of the following statements about internal environment is false?

According to the ERM,these help the company address all applicable laws and regulations.

According to the ERM,high level goals that are aligned with and support the company's mission are

The amount of risk a company is willing to accept in order to achieve its goals and objectives is

The COSO Enterprise Risk Management Framework includes eight components.Which of the following is not one of them?

When undertaking risk assessment,the expected loss is calculated like this.

Store policy that allows retail clerks to process sales returns for $300 or less,with a receipt dated within the past 60 days,is an example of

A(n)________ helps top-level managers with high-level activities that demand frequent and regular attention.

The SEC and FASB are best described as external influences that directly affect an organization's

Which of the following is an example of a preventive control?

Which component of the COSO Enterprise Risk Management Integrated Framework is concerned with understanding how transactions are initiated,data are captured and processed,and information is reported?

Which of the following duties could be performed by the same individual without violating segregation of duties controls?

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

Explain why management's philosophy and operating style are considered to be the most important element of the internal environment.

Which of the following statements about internal environment is false?

According to the ERM,these help the company address all applicable laws and regulations.

According to the ERM,high level goals that are aligned with and support the company's mission are

The amount of risk a company is willing to accept in order to achieve its goals and objectives is

The COSO Enterprise Risk Management Framework includes eight components.Which of the following is not one of them?

When undertaking risk assessment,the expected loss is calculated like this.

Store policy that allows retail clerks to process sales returns for $300 or less,with a receipt dated within the past 60 days,is an example of

A(n)________ helps top-level managers with high-level activities that demand frequent and regular attention.

The SEC and FASB are best described as external influences that directly affect an organization's

Which of the following is an example of a preventive control?

Which component of the COSO Enterprise Risk Management Integrated Framework is concerned with understanding how transactions are initiated,data are captured and processed,and information is reported?

Which of the following duties could be performed by the same individual without violating segregation of duties controls?

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