Ch 7: Internal Control and Cash
True
A person receiving cash should not deposit cash True/False
Sarbanes-Oxley
"To maintain public confidence and trust in the financial reporting of companies" is the purpose of -GAAP -the FASB -Sarbanes-Oxley -the IRS
True
A petty cash fund is reimbursed when the amount of money in the fund is reduced to a predetermine minimum amount True/False
Deducted from the cash balance according to the bank statement
In preparing a bank reconciliation, the amount of checks outstanding would be deduct be:
Publicly held companies
Sarbanes-Oxley applies to -publicly held companies - privately held businesses - not-for-profit organizations - All of these choices are correct.
False
Sarbanes-Oxley requires companies to maintain strong and effective internal controls and thus deter fraud and prevent misleading financial statements. True/False
True
Sarbanes-Oxley's purpose is to maintain public confidence and trust in the financial reporting of companies. True/False
True
The Sarbanes-Oxley Act applies only to companies whose stock is traded on public exchanges. True/False
True
The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures. True/False
False
There are three internal control objectives and they are to safeguard the company's reputation, ensure accurate financial reports, and ensure compliance with applicable laws. True/False
Monitoring
When a firm uses internal auditors, it is adhering to which of the following internal control elements? - risk assessment - proofs and security measures - information and communication - monitoring
C. Compliance with laws and regulations
When one of the following is NOT an element of internal control? A. Control environment B. Monitoring C. Compliance with laws and regulations D. Control procedures
Cost-benefit considerations
Which one of the following below is not an element of internal control? - information and communication - risk assessment - monitoring - cost-benefit considerations
Proofs and security measures
Which one of the following is not a factor that influences a business's control environment? - personnel policies - proofs and security measures - management's philosophy and operating style - organizational structure
