Question 1

In an internal audit function,the nature of independence is different than that of an external auditor.

Accepted Answer

A) True 
 B)False

Question 2

Listed below are four examples of possible exposures found in the various business cycles of a certain business.
Required: For each example,identify the transaction cycle control objective and give a solution which will help to reduce the possible exposure found in each example.
a.There is no written policy regarding access to the securities the company purchases as an investment.The securities are in a file in the bottom drawer of a file cabinet in the office.
b.The office supervisor makes "spur of the moment" decisions regarding the hiring and use of vendors for office supplies and maintenance of the office and warehouse building.
c.A sales representative sent out a shipment of merchandise to a customer on Friday afternoon,telling the warehouse supervisor that he would write up the paperwork the following Monday morning.
d.The clerk who prepares and sends statements to customers was hurt in an auto accident and is on sick leave.As a result,the sales representative now prepares and sends out customer statements when he has some free time.

Accepted Answer

a.Finance cycle."Access to cash and secu

Question 3

A computer-produced document that is intended for resubmission into the system,such as the part of the utility bill that the customer returns with payment,is a(n)

Accepted Answer

A)  invoice. 
B)  dual-submit document. 
C)  turnaround document. 
D)  automated input document. 
A)  invoice. 
B)  dual-submit document. 
C)  turnaround document. 
D)  automated input document.

Question 4

Controls increase productivity and the reliability of resulting output.

Accepted Answer

A) True 
 B)False

Question 5

The problems small businesses encounter with internal control that are addressed by COSO include the following except

Accepted Answer

A)  effective boards of directors. 
B)  limited segregation of duties and increased focus on monitoring. 
C)  compensating for limitations in information technology. 
D)  outsourcing increased reporting requirements. 
A)  effective boards of directors. 
B)  limited segregation of duties and increased focus on monitoring. 
C)  compensating for limitations in information technology. 
D)  outsourcing increased reporting requirements.

Question 6

Briefly describe five types of common business exposures and their related causes.

Accepted Answer

The text lists eight exposures,as foll

Question 7

An agreement or conspiracy among two or more people to commit fraud is known as

Accepted Answer

A)  embezzlement. 
B)  misappropriation. 
C)  collusion. 
D)  misrepresentation. 
A)  embezzlement. 
B)  misappropriation. 
C)  collusion. 
D)  misrepresentation.

Question 8

Research indicates that the most frequent type of fraud is

Accepted Answer

A)  misappropriation of funds. 
B)  check forgery. 
C)  false invoices. 
D)  credit card fraud. 
A)  misappropriation of funds. 
B)  check forgery. 
C)  false invoices. 
D)  credit card fraud.

Question 9

DWB Corporation suffered a loss due to the spoilage of certain raw materials used in the manufacturing of its products.The business transaction cycle in which this loss occurred is the

Accepted Answer

A)  revenue cycle. 
B)  expenditure cycle. 
C)  finance cycle. 
D)  production cycle. 
A)  revenue cycle. 
B)  expenditure cycle. 
C)  finance cycle. 
D)  production cycle.

Question 10

Corrective controls act to prevent errors and fraud before they happen.

Accepted Answer

A) True 
 B)False

Question 11

The diversion or misrepresentation of assets from either employees or third parties is known as ________ ________.

Accepted Answer

The answer of The diversion or misrepresentation of assets from...

Question 12

The component of internal control that is the foundation for all other components is

Accepted Answer

A)  risk assessment. 
B)  information and communication. 
C)  control activities. 
D)  control environment. 
A)  risk assessment. 
B)  information and communication. 
C)  control activities. 
D)  control environment.

Question 13

A trailer label is the last record of an inventory file,which contains a record count of the number of records in the file.

Accepted Answer

A) True 
 B)False

Question 14

The CEO and CFO must prepare a statement to accompany the audit report to certify that the company's reported financial statements are presented fairly in all material respects.

Accepted Answer

A) True 
 B)False

Question 15

Research indicates that the most expensive type of fraud is

Accepted Answer

A)  patent infringement. 
B)  false financial statements. 
C)  credit card fraud. 
D)  All of these types of fraud are equally expensive. 
A)  patent infringement. 
B)  false financial statements. 
C)  credit card fraud. 
D)  All of these types of fraud are equally expensive.

Question 16

Give five examples of ways a company may be exposed to excessive costs.

Accepted Answer

Students may mention any of the follow

Question 17

The segregation of authorization from the recording of transactions and custody of assets is an essential internal control process.

Accepted Answer

A) True 
 B)False

Question 18

Application controls are often classified as

Accepted Answer

A)  general, processing, and specific. 
B)  basic, specific, and accounting. 
C)  general, application, and output. 
D)  input, processing, and output. 
A)  general, processing, and specific. 
B)  basic, specific, and accounting. 
C)  general, application, and output. 
D)  input, processing, and output.

Question 19

Collusion occurs when a white-collar individual attempts to commit fraud within an organization.

Accepted Answer

A) True 
 B)False

Question 20

Commitment and competence are factors included in the ________ environment.

Accepted Answer

The answer of Commitment and competence are factors included in...

In an internal audit function,the nature of independence is different than that of an external auditor.

A computer-produced document that is intended for resubmission into the system,such as the part of the utility bill that the customer returns with payment,is a(n)

Controls increase productivity and the reliability of resulting output.

The problems small businesses encounter with internal control that are addressed by COSO include the following except

Briefly describe five types of common business exposures and their related causes.

An agreement or conspiracy among two or more people to commit fraud is known as

Research indicates that the most frequent type of fraud is

DWB Corporation suffered a loss due to the spoilage of certain raw materials used in the manufacturing of its products.The business transaction cycle in which this loss occurred is the

Corrective controls act to prevent errors and fraud before they happen.

The diversion or misrepresentation of assets from either employees or third parties is known as .

The component of internal control that is the foundation for all other components is

A trailer label is the last record of an inventory file,which contains a record count of the number of records in the file.

The CEO and CFO must prepare a statement to accompany the audit report to certify that the company's reported financial statements are presented fairly in all material respects.

Research indicates that the most expensive type of fraud is

Give five examples of ways a company may be exposed to excessive costs.

The segregation of authorization from the recording of transactions and custody of assets is an essential internal control process.

Application controls are often classified as

Collusion occurs when a white-collar individual attempts to commit fraud within an organization.

Commitment and competence are factors included in the ________ environment.

Accounting Information Systems: An Overview

Systems Techniques and Documentation

Ebusiness and Ecommerce

Fraud Examination and Fraud Management

Information Systems Security

Electronic Data Processing Systems

Revenue Cycle Processes

Procurement and Human Resources Business Processes

The Production Business Process

Systems Planning, analysis, and Design

Systems Project Management, implementation, operation, control

Data Management Concepts

Auditing Information Technology

Filters

Exam 4: Transaction Processing and the Internal Control Process

In an internal audit function,the nature of independence is different than that of an external auditor.

A computer-produced document that is intended for resubmission into the system,such as the part of the utility bill that the customer returns with payment,is a(n)

Controls increase productivity and the reliability of resulting output.

The problems small businesses encounter with internal control that are addressed by COSO include the following except

Briefly describe five types of common business exposures and their related causes.

An agreement or conspiracy among two or more people to commit fraud is known as

Research indicates that the most frequent type of fraud is

DWB Corporation suffered a loss due to the spoilage of certain raw materials used in the manufacturing of its products.The business transaction cycle in which this loss occurred is the

Corrective controls act to prevent errors and fraud before they happen.

The diversion or misrepresentation of assets from either employees or third parties is known as ________ ________.

The component of internal control that is the foundation for all other components is

A trailer label is the last record of an inventory file,which contains a record count of the number of records in the file.

The CEO and CFO must prepare a statement to accompany the audit report to certify that the company's reported financial statements are presented fairly in all material respects.

Research indicates that the most expensive type of fraud is

Give five examples of ways a company may be exposed to excessive costs.

The segregation of authorization from the recording of transactions and custody of assets is an essential internal control process.

Application controls are often classified as

Collusion occurs when a white-collar individual attempts to commit fraud within an organization.

Commitment and competence are factors included in the ________ environment.

Accounting Information Systems: An Overview

Systems Techniques and Documentation

Ebusiness and Ecommerce

Fraud Examination and Fraud Management

Information Systems Security

Electronic Data Processing Systems

Revenue Cycle Processes

Procurement and Human Resources Business Processes

The Production Business Process

Systems Planning, analysis, and Design

Systems Project Management, implementation, operation, control

Data Management Concepts

Auditing Information Technology

Filters

The diversion or misrepresentation of assets from either employees or third parties is known as .