Exam 4: Transaction Processing and the Internal Control Process

Presented below is a list of terms relating to accounting information systems,followed by definitions of those terms. Required: Match the letter next to each definition with the appropriate term.Each answer will be used only once. ________ 1.Fidelity bond ________ 2.Tickler file ________ 3.Suspense account ________ 4.Anticipation ________ 5.Corrective controls ________ 6.Input controls ________ 7.Authorization ________ 8.Batch sequence ________ 9.Forensic accounting ________ 10.Managerial audit A.A synonym for batch serial numbers B.The expectation of a given transaction or event at a particular time C.A contract with an insurance company that provides a financial guarantee of the honesty of the individual who is named in the bond contract D.A synonym for a managerial audit E.A control total for items awaiting further processing F.Designed to prevent or detect errors in the beginning stage of processing G.An activity concerned with preventing and detecting fraud H.A control file consisting of items sequenced by age used for processing or follow-up purposes I.These act to correct errors J.Limits the initiation of a transaction or performance of an activity to selected individuals

Which of the following are examples of risks that are relevant to the financial reporting process?

Guidance for Section 404 compliance can be found in

An example of a suspense file is a file of back-ordered items awaiting shipment to customers.

An audit committee is required by

Monitoring,the fifth component of internal control,involves

If the treasury and controller functions are independent,which of the following should be assigned to the controller to maintain effective control?

ERM contains eight components.Which one of the following is not a component of ERM?

Enterprise risk management contains eight components.Identify at least six and explain its importance to managing risk within a company.

A well planned system of internal accounting control normally would include procedures that are designed to provide reasonable assurance that

Which one of the following is not an element of the internal control process?

Ratings of the relative strength or reliability of controls may be entered in a control matrix.

The computer operations supervisor has a good attendance record,which demonstrates the general operating procedure of competency of personnel.

The reentry of transaction data with machine comparison of the initial entry to the second entry to detect errors is called

General controls can be a substitute for application controls.

ISO 27002 aids companies with Section ________ compliance.

A list of changes to on-line computer files is stored on magnetic tape to provide a transaction trail.

Totals of homogeneous amounts for a group of transactions or records,usually expressed in dollars or quantities,is known as a(n)

Fraudulent financial reporting

"Amounts due to vendors should be accurately and promptly classified,summarized,and reported" is a representative control objective of the