chapter 4 smartbook

Preparation of a bank______________ helps maintain control of cash accounts

reconciliation

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 that is most easily stolen and susceptible to fraud is

cash

routine activities that are meant to continually observe internal control activites

monitoring

The framework for designing an internal control system is provided by the

Committee of Sponsoring Organizations (COSO) of the Treadway Commission.

Effective internal control over cash requires segregation of duties. Which of the following duties should be segregated?

Depositing checks into the bank and recording receipts in the accounting records Opening the mail and deposit of checks in the bank

The Sarbanes-Oxley Act applies to

companies that are required to file with the SEC.

procedures for maintaining separation of duties

control activities

Formal policies to evaluate internal and external threats to achieving company objectives

control environment

overall attitude of the company with respect to internal controls

control environment

Cash and Cash Equivalents

currency, balances in checking/savings accounts, checks received, credit/debit card sales, and investments with maturity dates <3 months from date of purchase

The Committee of Sponsoring Organizations (COSO) of the Treadway Commission provided a framework for

designing an internal control system.

A periodic performance review is an example of a(n)

detective control

When a person intentionally deceives another person or company for personal gain, this is referred to as

fraud

transfer of ideas from lower managers to top executives for accurate financial reporting

information and communication

A company's plans to safeguard company assets and enhance the reliability and accuracy of accounting information are referred to as

internal controls

The use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employer's resources is

occupational fraud

Two types of control activities are

preventive and detective controls

Internal control consists of plans to

provide accurate and reliable accounting information. safeguard company assets.