Exam 4: Transaction Processing and the Internal Control Process

Physical theft is only a minor threat to the solvency of most business organizations.

The immediate return of input information to the sender for comparison and approval is called feedback.

An interesting aspect of white-collar crime is that

Management's philosophy and operating style are part of which component of internal control?

The audit trail concept is basic to the design and audit of an accounting information system.

Small and large companies can gain cost efficiencies in internal control by

COSO reports contain the most authoritative framework for internal control processes.

________ bonding is common for employees who are directly responsible for the custody of assets.

An audit committee

Selecting the best opportunities and managing uncertainties is part of Enterprise Risk Management (ERM).

Which of the following would impair the effectiveness of the separation of incompatible functions in an organization?

A hash total is a meaningless number that only is important for internal control purposes.

An analytical technique commonly used to analyze and examine an internal control process is known as a(n)

Presented below are ten control features,followed by ten statements describing either the achievement of a control feature (i.e.,a system success)or a system deficiency. Required: On the answer line to the left of each control feature,insert the capital letter from the list of the most closely related system success or deficiency.Each letter will be used only once. ________ 1.Backup and recovery ________ 2.Check digit ________ 3.Batch balancing ________ 4.Format check ________ 5.Suspense file ________ 6.Hash total ________ 7.Password ________ 8.Turnaround document ________ 9.Forms design ________ 10.Reasonableness test A.This helps control input accuracy by ensuring that dates are properly entered using the format MM/DD/YYYY. B.Many customer account numbers entered into the billing transaction file are invalid. C.This could help prevent the entry of inconsistent data elements,such as entering a tax code for a customer for whom sales should be nontaxable. D.In entering a batch of invoices into the computer,an operator made several errors in keying the invoice numbers.As a result,the computer program updated computer accounts with incorrect invoice information. E.A new field salesperson omitted several data elements when completing the sales order forms. F.The vendor master file was damaged in yesterday's update,and cannot be used for today's update. G.A former employee gained access to the computer system and damaged the customer master file. H.A computer operator discovered that he had not input all items in a batch. I.This feature speeds up data entry because some of the input data is prerecorded on the source document and can be scanned. J.A supervisor reviews this document frequently to dispose of partially processed transactions.

What is corporate culture? Why might someone argue that the corporate culture has more influence over ethical behavior in a firm than the corporate ethics code of conduct?

In cases of ________,"the procedures did not fail,the people did."

An exposure is a(n)________ times its ________ consequences.

Identifying transaction documents to prevent their further or repeated use after they have performed their function is known as

The three types of functions that normally should be segregated to promote internal control are