Ch.4 Cash and Internal Controls
Who is responsible for providing an opinion on management's assessment of internal control?
The company's auditors
The asset most susceptible to fraudulent activity is(are)
cash
When two or more persons work together to circumvent internal control procedures and commit a fraud, this is called _____________
collusion
The Sarbanes-Oxley Act applies to
companies that are required to file with the SEC.
the ______________ ____________ sets the overall ethical tone of the company with respect to internal control.
control, environment
The Committee of Sponsoring Organizations (COSO) of the Treadway Commission provided a framework for
designing an internal control system.
The two types of control procedures are preventive and ___________
detective
The use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employer's resources is called occupational
fraud
When a person intentionally deceives another person or company for personal gain, this is referred to as ___________
fraud
A periodic performance review is an example of a(n) ________ control
internal
A company's plans to safeguard company assets and enhance the reliability and accuracy of accounting information are referred to as
internal controls.
The most common source of occupational fraud is:
misuse of company resources
Separation of duties and E-commerce controls are examples of ______ controls.
preventive
Two types of control activities are
preventive and detective controls.
Careful consideration of internal and external factors that may cause harm to a company is called______________ assessment
risk
Which of the following are detective controls?
-Performance reviews -Reconciliations -Audits
Which of the following are preventive controls?
-Physical controls -Separation of duties
The two most common sources of occupational fraud are:
-financial statement manipulation -misuse of company resources
The key provisions of the Sarbanes-Oxley Act include
-restricting activities of auditors to prevent conflicts of interest. -requiring that corporate executives certify financial statements. -requiring documentation and assessing effectiveness of internal controls.
The kInternal control consists of plans to
-safeguard company assets. -provide accurate and reliable accounting information.
The framework for designing an internal control system is provided by the
Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
Which of the following led to the passage of the Sarbanes-Oxley Act of 2002?
High profile accounting scandals during the early 2000s
For internal control purposes, risk assessment considers which two types of risk?
Internal and external risks
Which of the following is classified as part of the control environment?
Overall ethical tone of the organization with respect to internal control
High profile accounting scandals in the early 2000s prompted the passage of the:
Sarbanes-Oxley Act
The Public Company Accounting Reform and Investor Protection Act of 2002 is known as the
Sarbanes-Oxley Act.
The control environment is most affected by the attitudes and actions of
management
Who has final responsibility for internal controls?
management