Chapter 5 Learn
Controls; opportunity
A weak system of internal __ provides the __ to commit fraud
The accounting department counts the cash, prepares the deposit slip and deposits the cash in the bank
Which of the following is not an internal control for checks received through the mail?
Outstanding Checks
Which of the following is subtracted from the bank balance on a bank reconciliation?
Deposit in transit
Which of the reconciling items does not require a journal entry?
Rationalization, Incentive, Opportunity
Components of the fraud triangle:
Direct
A ___ deposit is initiated by an EFT instructing a bank to transfer pay due employees into the employees' bank accounts
Fraud
An attempt to deceive others for personal gain
Decreases the risk of fraud
Anonymous information about questionable accounting matters sent to the audit committee through tip lines:
Documenting Procedures
Assigning sequential numbers to cash sales, so that the accounting staff can ensure that every sale has been recorded is required by the internal control principle of:
True
Committing financial fraud can result in stiff penalties, including fines and jail sentences T/F
Transit, bank
Deposits in ___ are added to the ___ side of the bank reconciliation
Give a cash register receipt to every customer Restrict access to the cash register
Good internal control over cash requires cashiers to __
Independent Verification
If a company hires an auditor to check that the work done by others within the company is supported by documentation, this is part of the internal control procedure of:
$27 deduction from the book balance
If the company's accountant mistakenly recorded a $58 deposit as $85, the error would be shown on the bank reconciliation as a:
False
Internal controls prevent and detect all errors and fraud T/F
Restricting Access
Physically locking up assets and electronically securing access to other assets and information is required by the internal control principle of:
Corporate executives, auditors, internal controls
The Sarbanes-Oxley Act provides increased regulations for:
Credit, because a deposit is a liability from the banks point of view
The bank will show a customers deposit on bank statements as a:
Cleared
When a check is presented to a bank for payment and the amount is deducted from the payer's account the check is said to have ___ the bank
Conceal Fraud
Which is not a significant objective of the Sarbanes-Oxley Act