Question 1

The Sarbanes-Oxley Act (SOX)applies to

Accepted Answer

A) all companies with gross annual revenues exceeding $500 million. 
B) publicly traded companies with gross annual revenues exceeding $500 million. 
C) all private and public companies incorporated in the United States. 
D) all publicly traded companies. 
A) all companies with gross annual revenues exceeding $500 million. 
B) publicly traded companies with gross annual revenues exceeding $500 million. 
C) all private and public companies incorporated in the United States. 
D) all publicly traded companies.

Question 2

According to the COSO Enterprise Risk Management Framework,the risk assessment process incorporates all of the following components except

Accepted Answer

A) reporting potential risks to auditors. 
B) identifying events that could impact the enterprise. 
C) evaluating the impact of potential events on achievement of objectives. 
D) establishing objectives for the enterprise. 
A) reporting potential risks to auditors. 
B) identifying events that could impact the enterprise. 
C) evaluating the impact of potential events on achievement of objectives. 
D) establishing objectives for the enterprise.

Question 3

The definition of the lines of authority and responsibility and the overall framework for planning,directing,and controlling is laid out by the

Accepted Answer

A) control activities. 
B) organizational structure. 
C) budget framework. 
D) internal environment. 
A) control activities. 
B) organizational structure. 
C) budget framework. 
D) internal environment.

Question 4

Explain why the Foreign Corrupt Practices Act was important to accountants.

Accepted Answer

The act is important to accountants beca

Question 5

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 6

Congress passed this federal law for the purpose of preventing financial statement fraud,to make financial reports more transparent and to strengthen the internal control of public companies.

Accepted Answer

A) Foreign Corrupt Practices Act of 1977 
B) The Securities Exchange Act of 1934 
C) The Sarbanes-Oxley Act of 2002 
D) The Control Provision of 1998 
A) Foreign Corrupt Practices Act of 1977 
B) The Securities Exchange Act of 1934 
C) The Sarbanes-Oxley Act of 2002 
D) The Control Provision of 1998

Question 7

Explain how a company could be the victim of fraud,even if ideal segregation of duties is enforced.

Accepted Answer

When a system effectively incorporates a

Question 8

Which of the following factors is not a reason forensic investigators are increasingly used in accounting?

Accepted Answer

A) the Sarbanes-Oxley Act 
B) new accounting rules 
C) audit fee increases 
D) pressure from boards of directors 
A) the Sarbanes-Oxley Act 
B) new accounting rules 
C) audit fee increases 
D) pressure from boards of directors

Question 9

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 10

Which internal control framework is widely accepted as the authority on internal controls?

Accepted Answer

A) COBIT 
B) COSO Integrated Control 
C) COSO Enterprise Risk Management 
D) Sarbanes-Oxley Control Framework 
A) COBIT 
B) COSO Integrated Control 
C) COSO Enterprise Risk Management 
D) Sarbanes-Oxley Control Framework

Question 11

Which of the following is not a key method of monitoring performance?

Accepted Answer

A) performing internal control evaluation 
B) employing a chief risk officer 
C) implementing effective supervision 
D) monitoring system activities 
A) performing internal control evaluation 
B) employing a chief risk officer 
C) implementing effective supervision 
D) monitoring system activities

Question 12

Reducing management layers,creating self-directed work teams,and emphasizing continuous improvement are all related to which aspect of internal environment?

Accepted Answer

A) organizational structure 
B) methods of assigning authority and responsibility 
C) management philosophy and operating style 
D) commitment to competence 
A) organizational structure 
B) methods of assigning authority and responsibility 
C) management philosophy and operating style 
D) commitment to competence

Question 13

The organization chart for Renata 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 14

Which type of audit assesses employee compliance with management policies and procedures?

Accepted Answer

A) external audit 
B) internal audit 
C) network security audit 
D) all of the above 
A) external audit 
B) internal audit 
C) network security audit 
D) all of the above

Question 15

Applying the COBIT5 framework,governance is the responsibility of

Accepted Answer

A) internal audit. 
B) external audit. 
C) management. 
D) the board of directors. 
A) internal audit. 
B) external audit. 
C) management. 
D) the board of directors.

Question 16

A neural network is a software program that has

Accepted Answer

A) the ability to read text. 
B) the ability to learn. 
C) the capability to extract information from an individual's brain. 
D) the capability to inject information into an individual's brain. 
A) the ability to read text. 
B) the ability to learn. 
C) the capability to extract information from an individual's brain. 
D) the capability to inject information into an individual's brain.

Question 17

Which type of audits can detect fraud and errors?

Accepted Answer

A) external audits 
B) internal audits 
C) network security audits 
D) all of the above 
A) external audits 
B) internal audits 
C) network security audits 
D) all of the above

Question 18

Identify the preventive control below.

Accepted Answer

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

Question 19

Which of the following is not a principle related to information and communicating in the updated COSO Integrated Control framework?

Accepted Answer

A) Communicate relevant internal control matters to external parties. 
B) Obtain or generate relevant,high-quality information to support internal control. 
C) Surround internal control processes with information technology that enables discrepancies to be identified. 
D) Internally communicate the information necessary to support the other components of internal control. 
A) Communicate relevant internal control matters to external parties. 
B) Obtain or generate relevant,high-quality information to support internal control. 
C) Surround internal control processes with information technology that enables discrepancies to be identified. 
D) Internally communicate the information necessary to support the other components of internal control.

Question 20

An accounting policy that requires a purchasing manager to sign off on all purchases over $5,000 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.

Exam 7: Control and Accounting Information Systems

The Sarbanes-Oxley Act (SOX)applies to

According to the COSO Enterprise Risk Management Framework,the risk assessment process incorporates all of the following components except

The definition of the lines of authority and responsibility and the overall framework for planning,directing,and controlling is laid out by the

Explain why the Foreign Corrupt Practices Act was important to accountants.

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

Congress passed this federal law for the purpose of preventing financial statement fraud,to make financial reports more transparent and to strengthen the internal control of public companies.

Explain how a company could be the victim of fraud,even if ideal segregation of duties is enforced.

Which of the following factors is not a reason forensic investigators are increasingly used in accounting?

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

Which internal control framework is widely accepted as the authority on internal controls?

Which of the following is not a key method of monitoring performance?

Reducing management layers,creating self-directed work teams,and emphasizing continuous improvement are all related to which aspect of internal environment?

The organization chart for Renata 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?

Which type of audit assesses employee compliance with management policies and procedures?

Applying the COBIT5 framework,governance is the responsibility of

A neural network is a software program that has

Which type of audits can detect fraud and errors?

Identify the preventive control below.

Which of the following is not a principle related to information and communicating in the updated COSO Integrated Control framework?

An accounting policy that requires a purchasing manager to sign off on all purchases over $5,000 is an example of

Accounting Information Systems: an Overview

Overview of Transaction Processing and Enterprise Resource Planning Systems

Systems Documentation Techniques

Relational Databases

Computer Fraud

Computer Fraud and Abuse Techniques

Controls for Information Security

Confidentiality and Privacy Controls

Processing Integrity and Availability Controls

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

Database Design Using the Rea Data Model

Implementing an Rea Model in a Relational Database

Special Topics in Rea Modeling

Introduction to Systems Development and Systems Analysis

Ais Development Strategies

Systems Design,implementation,and Operation

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