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