Accounting 2nd Half
When a person intentionally deceives another person or company for personal gain, this is referred to as
Fraud
Who has final responsibility for internal controls?
Management
Which of the following is an example of separation of duties in a good system of internal control?
The individual who receives the inventory does not have access to the accounting records.
Control Activities
The policies and procedures that help ensure that management's directives are carried out.
Which of the following items are included in cash?
balance in checking account currency and coins checks from customers
Which of the following are components of internal control?
monitoring control activities risk management Control environment
The three elements present in the fraud triangle are
motive opportunity rationalization
Companies have the greatest ability to eliminate this element of fraud:
opportunity
Separation of duties and E-commerce controls are examples of ______ controls.
preventive
Internal control consists of plans to (Select all that apply.)
safeguard company assets. provide accurate and reliable accounting information.
Who must personally certify the financial statements and company disclosures or risk financial penalties and criminal prosecution for fraudulent misstatements?
Corporate executives
What requirements for corporate accountability are included in the Sarbanes-Oxley Act? (Select all that apply.)
Corporate executives may be criminally liable for fraudulent financial statements Corporate executives must personally certify the financial statements
Risk Assessment
Identifies and analyzes factors that could prevent objectives from being achieved
Monitoring
Includes formal procedure for reporting control deficiencies
The element of fraud which is easiest for companies to eliminate is
Opportunity
The Public Company Accounting Reform and Investor Protection Act of 2002 is known as the
Sarbanes-Oxley Act.
Which of the following are preventive controls?
Separation of duties Physical controls
The asset most susceptible to fraudulent activity is(are)
cash
The asset most susceptible to fraudulent activity is
cash or money
The Sarbanes-Oxley Act applies to
companies that are required to file with the SEC.
True or false: The entry for a sale to customers is different depending on whether the customer pays with cash or a check.
false
Control Environment
formal policies related to management's philosophy, assignment of responsibilities, and organizational structure
The use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employer's resources is called occupational
fraud
A company's plans to safeguard company assets and enhance the reliability and accuracy of accounting information are referred to as
internal controls
The three elements present in every fraud are commonly referred to as the fraud
triangle