AIS Test 4
The COSO internal control component Control Activities usually maps to which COBIT domain for IT processes? A) AI5 Procure IT resources B) ME4 Provide IT governance C) PO9 Assess and manage IT risks D) PO1 Define and strategic IT plan
A) AI5 Procure IT resources
Which of the following is not part of the information criteria as defined by COBIT? A) Scalability B) Confidentiality C) Availability D) Integrity
A) Scalability
The board of directors serves as an interference between the stockholders of an organization and its operating management A) TRUE B) FALSE
A) TRUE
A company policy should clearly indicate that defective merchandise returned by customers is to be delivered to the A) sales clerk B) inventory control clerk C) receiving clerk D) accounts receivable clerk
C) receiving clerk
The identification and analysis of differences between the values contained in two substantially identical files or between a detail file and a control file is ________. A) validity checking B) clearing C) reconciliation D) verification
C) reconciliation
To do a blind count, the receiving department A) should prepare the receiving report only after the count is completed B) should not receive a copy of the purchase order C) should receive a copy of the purchase order with the quantities omitted D) should not receive a copy of the purchase requisition
C) should receive a copy of the purchase order with the quantities omitted
Which of the following would be the most appropriate test to determine whether purchase orders are being processed on a timely basis? A) Select a block of used purchase order numbers and account for all numbers in the block B) Discuss processing procedures with operating personnel and observe actual processing of purchases C) Determine the dates of unpaid accounts payable invoices D) Compare dates of selected purchase orders with those of purchase requisitions
D) Compare dates of selected purchase orders with those of purchase requisitions
Which of the following should not have access to signed paychecks? A) Cash disbursement, personnel, and timekeeping B) Cash disbursement, personnel, and bookkeeping C) Payroll and personnel D) Personnel, payroll, and timekeeping
D) Personnel, payroll, and timekeeping
To provide an adequate separation of functions in the accounts receivable business process, maintaining the subsidiary accounts receivable ledger should be the responsibility of ________. A) billing B) general ledger C) cash receipts D) accounts receivable
D) accounts receivable
The primary objective of a voucher system is to A) sign checks B) reconcile the vendor subsidiary ledger to the control account C) record liabilities D) review cash payments
D) review cash payments
The mailing of disbursement checks and remittance advices should be controlled by the employee who A) verified the mathematical accuracy of the vouchers and remittance advices B) approved the vouchers for payment C) matched the receiving reports, purchase orders, and vendors' invoices D) signed the checks last
D) signed the checks last
What percentage of occupational fraud is committed by upper management? A) 19% B) 15% C) 25% D) 30%
A) 19%
What percentage of occupational fraud is committed by the accounting department? A) 29% B) 16% C) 35% D) 38%
A) 29%
Management's philosophy and operating style are part of which component of internal control? A) Control environment B) Control activities C) Information and communication D) Monitoring
A) Control environment
Which of the following is not a universal rule for achieving strong internal control over cash? A) Determine the receiving of cash as much as possible B) Deposit each day's cash receipts by the end of the day C) Have bank reconciliations performed by employees independent with respect to handling cash D) Separate the cash handling and record-keeping functions
A) Determine the receiving of cash as much as possible
The most likely result of ineffective internal control policies and procedures in the revenue cycle is that A) Final authorization of credit memos by personnel in the sales department could permit an employee defalcation B) Irregularities in recording transactions in the subsidiary accounts could delay in goods shipped C) Omission of shipping documents could go undetected, causing an understatement of inventory D) Fictitious transactions could be recorded causing an understatement of revenues and overstatement of receivables
A) Final authorization of credit memos by personnel in the sales department could permit an employee defalcation
What documents typically accompany the physical shipment of goods to a customer? A) The packing list and a bill of lading B) The picking list and purchase order C) Packing and picking lists D) The sales order and an invoice
A) The packing list and a bill of lading
Which one of the following represents a weakness in internal control regarding the human resources area? A) The payroll staff distributes paychecks to employees in other departments B) Supervisors are responsible for reviewing and approving time reports of their subordinate employees C) The supervisors of all departments are responsible for initiating requests for salary increases for their subordinate employees D) The payroll department supervisor makes decisions regarding the hiring of payroll department employees
A) The payroll staff distributes paychecks to employees in other departments
Not even the strongest system of controls can eliminate all risk of organizations being defrauded by employees who are sufficiently motivated to find loopholes. A) TRUE B) FALSE
A) True
A sales order is A) an internal use document B) the same as the purchase order C) an external use document D) optional when selling to established customers
A) an internal use document
The best way to prevent improper buyer-vendor relationships is to A) have formal written policies and procedures over procurement B) separate the purchasing and receiving functions C) have cash disbursements report to the treasurer D) permit only purchasing supervisors to select vendors
A) have formal written policies and procedures over procurement
The function responsible for reconciling the bank account upon which voucher checks are drawn is A) internal audit B) cash disbursements C) accounts payable D) purchasing
A) internal audit
To determine whether accounts payable are complete, an auditor performs a test to verify that all merchandise received is recorded. The population of documents for this test consists of all A) receiving reports B) purchase orders C) cancelled checks D) vendors' invoices
A) receiving reports
For the purpose of proper accounting control, postdated checks remitted by customers should be A) restrictively endorsed B) returned to the customer C) recorded as a cash sale D) placed in the joint custody of two officers
A) restrictively endorsed
To conceal defalcations involving receivables, the auditor would expect an experienced bookkeeper to charge which of the following accounts? A) sales returns B) petty cash C) misc expense D) misc income
A) sales returns
The department responsible for collecting and maintaining time cards and reconciling these to job time summary tickets is the A) timekeeping department B) production department (for factory workers) C) personnel department D) payroll department
A) timekeeping department
One way in which a company can produce a corporate culture that supports ethical behavior is through A) Emphasis on short-run goals and objectives B) A cultural audit to bring to light the corporation's true culture and ethical behavior C) All of these answers are correct D) Emphasis on sales quotas and deadlines
B) A cultural audit to bring to light the corporation's true culture and ethical behavior
The marking of a form or document to direct to restrict its further processing is called A) A restriction B) An endorsement C) A cancellation D) Blocking
B) An endorsement
Which of the following constitutes the most significant risk within the purchasing cycle? A) Poor records of transfers between warehouses often result in unnecessary purchases and excess inventories B) Receiving department personnel sign receiving documents without inspecting or counting the goods C) Warehouse personnel do not compare quantities received to quantities shown on transfer tickets D) Large quantities of relatively inexpensive parts are stored in open areas near workstations to reduce production slowdowns
B) Receiving department personnel sign receiving documents without inspecting or counting the goods
Which of the following is an effective internal accounting control over cash payments? A) A check-signing machine with two signatures should be used. B) Signed checks should be mailed under the supervision of the checks signer C) Checks should be prepared only by people responsible for cash receipts and cash disbursements D) Spoiled checks that have been voided should be disposed of immediately
B) Signed checks should be mailed under the supervision of the checks signer
The greatest amount of internal and business process control in the cash disbursements process comes from A) the prenumbering of vouchers and checks B) a final review of transaction documents prior to the authorization of payment C) the signing of voucher checks by an authorized party D) the accounts payable function
B) a final review of transaction documents prior to the authorization of payment
Which of the following control procedures is not usually performed in the vouchers payable department? A) having an authorized person approve the voucher B) controlling the mailing of the check and remittance advice C) matching the receiving report with the purchase order D) determining the mathematical accuracy of the vendor's invoice
B) controlling the mailing of the check and remittance advice
To provide an adequate seperation of functions in the accounts receivable business process, maintaining the accounts receivable control account should be the responsibility of A) cash receipts B) general ledger C) accounts receivable D) billing
B) general ledger
Vendor payment is typically made A) when a goods receipt document is prepared B) once an invoice is posted C) when an authorized order is placed D) when a purchase requisition has been approved
B) once an invoice is posted
In a properly designed internal accounting control system, the same employee should not be permitted to A) sign checks and cancel supporting documents B) prepare disbursement vouchers and sign checks C) initiate a request to order merchandise and approve merchandise received D) receive merchandise and prepare a receiving report
B) prepare disbursement vouchers and sign checks
A document which identifies a vendor and confirms the quantity and price of goods identified in it is called a(n) A) scheduling agreement B) purchase order C) outline agreement D) purchase requisition
B) purchase order
Tracing bills of lading to sales invoices provides evidence that A) invoiced sales were shipped B) shipments to customers were invoiced C) shipments to customers were recorded as sales D) recorded sales were shipped
B) shipments to customers were invoiced
An entity with a large volume of customer remittances by mail could most likely reduce the risk of employee misappropriation of cash by using A) daily check summaries B) employee fidelity bonds C) a bank lock-box system D) independently prepared mailroom prelists
C) a bank lock-box system
The amount of cash receipts for Aug 12 is $6,389.42. For general ledger to post this amount, it must receive A) a control total from accounts receivable B) a journal voucher from cash receipts C) a journal voucher from cash receipts and a control total from accounts receivable D) the deposit slip from the bank for Aug 12 showing $6,389.42 as a deposit
C) a journal voucher from cash receipts and a control total from accounts receivable
To provide an adequate seperation of functions in the accounts receivable business process, maintaining the subsidiary accounts receivable ledger should be the responsibility of A) cash receipts B) general ledger C) accounts receivable D) billing
C) accounts receivable
To determine whether the system of internal accounting control operated effectively to minimize errors of failure to invoice a shipment, the auditor would select a sample of transactions from the population represented by the A) open invoice file B) sales invoice file C) bill of lading file D) customer order file
C) bill of lading file
With respect to the segregation of duties, the main function of cash disbursement is A) reconciliation B) recording of transactions C) custody of assets D) authorization
C) custody of assets
Matching the supplier's invoice, the purchase order, and the receiving report normally should be the responsibility of the A) warehouse receiving function B) purchasing function C) general accounting function D) treasury function
C) general accounting function
An appropriate compliance test to confirm that only valid employees are on the payroll is to ensure that A) personnel places names on payroll only on the basis of written, prenumbered authorizations B) payroll checks are delivered directly to each supervisor by the payroll clerk C) payroll bank accounts are reconciled monthly to appropriate personnel D) separate personnel folders are originated for each new employee
C) payroll bank accounts are reconciled monthly to appropriate personnel
It would be appropriate for the payroll accounting department to be responsible for which of the following functions? A) temporarily retaining unclaimed employee paychecks B) maintaining records of employment, discharges, and pay increases C) preparing periodic government reports as to employees' earnings and withholding taxes D) approving employee time records
C) preparing periodic government reports as to employees' earnings and withholding taxes
Using a lock-box system A) expedites the cash flow for a company B) helps to reduce interest income lost due to delays in depositing out-of-state-checks C) promotes the segregation of duties because a third-party handles cash receipts D) All of these answers are correct
D) All of these answers are correct
Proper internal control over the cash payroll function would mandate which of the following? A) Unclaimed pay envelopes should be retained by the paymaster B) A separate checking account for payroll should be maintained C) The payroll clerk should file the envelopes with cash and a computation of the net wages D) Each employee should be asked to sign a receipt
D) Each employee should be asked to sign a receipt
Which of the following controls most likely would be effective in offsetting the tendency of sales personnel to maximize sales volume at the expense of high bad-debt write offs? A) Shipping documents and sales invoices are matched by an employee who does not have authority to write off bad debts B) Subsidiary accounts receivable records are reconciled to the control account by an employee independent of the authorization of credit C) Employees responsible for authorizing sales and bad-debt write offs are denied access to cash D) Employees involved in the credit-granting function are separated from the sales function
D) Employees involved in the credit-granting function are separated from the sales function
Which of the following procedures most likely would be considered a weakness in an entity's internal controls over payroll? A) The personnel department sends employees' termination notices to the payroll department B) Payroll checks are prepared by the payroll department and signed by the treasurer C) A voucher for the amount of the payroll is prepared in the general accounting department based on the payroll department's payroll summary D) The employee who distributes payroll checks returns unclaimed payroll checks to the payroll department
D) The employee who distributes payroll checks returns unclaimed payroll checks to the payroll department
Shipping documents should be compared with sales records or invoices to A) determine whether payments are applied properly to customer accounts B) ascertain whether all sales are supported by shipping documents C) determine whether unit prices billed are in accordance with sales contracts D) ensure that shipments are billed to customers
D) ensure that shipments are billed to customers
The department responsible for authorizing employee pay deductions is the A) payroll department B) production department (for factory workers) C) independent paymaster D) personnel department
D) personnel department
For effective internal accounting control, employees maintaining the accounts receivable subsidiary ledger should not approve A) employee overtime wages B) credit granted to customers C) cash disbursements D) write-offs to customer accounts
D) write-offs to customer accounts
A workflow management system A) Automatically forwards electronics document to the next step in the business process B) Is not as effective as a manual system C) Is more cost effective than a DFD system D) Is another way to document business processes
A) Automatically forwards electronics document to the next step in the business process
A gap analysis is done to A) Compare the baseline accounting system to the customized accounting system that meets the companyʹs needs B) Identify the companyʹs current business processes C) Help employees adjust to the new system D) Conform business processes to regulatory requirements
A) Compare the baseline accounting system to the customized accounting system that meets the companyʹs needs
The department or function that is responsible for selecting a vendor to order materials from is A) purchasing. B) sales. C) individual departments requesting the material. D) requisitioning (stores).
A) purchasing.
Programming to customize the baseline system carry forward into later versions, saving some enterprises millions of dollars for customizations that do not need to be abandoned or redone. A) TRUE B) FALSE
B) FALSE
The SOX legislation basically requires management of privately held companies must assess and report on the effectiveness of internal controls for financial reporting using a recognized framework A) TRUE B) FALSE
B) FALSE
The advantage to the stages approach to customizing an accounting system is that the new system goes ʺliveʺ all at once. A) TRUE B) FALSE
B) FALSE
The stages approach to customization involves customizing and installing customer, vendor, employee, and remaining modules for the entire enterprise at the same time. A) TRUE B) FALSE
B) FALSE
The term risk is synonymous with exposure A) TRUE B) FALSE
B) FALSE
The typical fraud lasts three years before it is detected A) TRUE B) FALSE
B) FALSE
Corruption involves theft of assets for personal gain. A) TRUE B) FALSE
B) False
The accounting profession is self-regulated. A) TRUE B) FALSE
B) False
Which COSO Internal Control-Integrated Framework essential component of an effective internal control system includes the accounting system for identifying, recording, processing, and reporting transactions and financial data? A) Monitoring B) Information and Communication C) Control Activities D) Control Environment
B) Information and Communication
Which COSO Internal Control-Integrated Framework essential component of an effective internal control system involves assessing internal controls as well as the process for taking corrective action? A) Control Activities B) Monitoring C) Control Environment D) Risk Assessment
B) Monitoring
Which of the following normally receives a copy of the purchase requisition? A) Receiving department B) Purchasing C) Stores D) Vendor
B) Purchasing
Which SOX section requires the public accounting firm that audits the financial statements of the company to issue an attestation report regarding the effectiveness of the company's internal controls? A) Section 806. Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud B) Section 404. Management Assessment of Internal Controls C) Section 906. Corporate Responsibility for Financial Reports D) Section 302. Corporate Responsibility for Financial Reports
B) Section 404. Management Assessment of Internal Controls
Which level in the company corresponds to the Entity-Level IT Controls? A) Information management B) Top management C) IT services D) Business processes
B) Top management
The prices entered on sales orders should be independent of the sales order function. To achieve this transaction cycle control, the company's ordering system should use A) prices found in the order database. B) an independently prepared master price list authorized by management. C) prices listed by the sales representative who initiated the order. D) All of these answers are correct.
B) an independently prepared master price list authorized by management.
An audit committee is required by A) The Securities and Exchange Commission B) both the New York Stock Exchange and the Sarbanes-Oxley Act of 2002 C) generally accepted accounting principles D) the AICPA
B) both the New York Stock Exchange and the Sarbanes-Oxley Act of 2002
The two broad categories of transaction control are A) general control and basic controls B) general controls and application controls C) basic controls and application controls D) general controls and specific controls
B) general controls and application controls
Which of the following documents is used to post sales on account to customers in the accounts receivable ledger? A) purchase orders B) invoices C) remittance advices D) bills of lading
B) invoices
Which organization was created by the Sarbanes-Oxley Act of 2002? A) Public Company Accounting Oversight Board (PCAOB) B) Institute of Management Accountants (IMA) C) American Accounting Association (AAA) D) Committee of Sponsoring Organizations of the Treadway Commission (COSO)
A) Public Company Accounting Oversight Board
Which of the following is not the purpose of internal controls? A) Public examine of private data B) Reliability of financial reporting C) Compliance with laws and regulations D) Effectiveness and efficiency of operations
A) Public examine of private data
Which COSO Internal Control-Integrated Framework essential component of an effective internal control system involves identifying, analyzing, and managing risks that affect a company's ability to record, process, summarize, and report financial data properly? A) Risk Assessment B) Control Environment C) Control Activities D) Monitoring
A) Risk Assessment
A list of changes to on-line computer files is stored on magnetic tape to provide a transaction trail A) TRUE B) FALSE
A) TRUE
Application controls ensure completeness and accuracy of transaction processing, authorization, and validity A) TRUE B) FALSE
A) TRUE
IT general controls have a pervasive effect on all internal controls. A) TRUE B) FALSE
A) TRUE
In a gap analysis, the gap between the baseline modules ad the customization required to meet enterprise-specific needs is analyzed A) TRUE B) FALSE
A) TRUE
Increasingly the expectation is that the auditor and the IT professional learn more about the other's field A) TRUE B) FALSE
A) TRUE
Increasingly, the PCAOB is expecting auditors to understand how IT affects the audit and integrating IT into the audit. A) TRUE B) FALSE
A) TRUE
Internal controls for the accounting system are incomplete without IT controls. A) TRUE B) FALSE
A) TRUE
SOX emphasizes a strong system of internal control as a way of avoiding Enron-sized accounting frauds. A) TRUE B) FALSE
A) TRUE
SOX section 404 requires requires each annual report of a publicly traded company to contain an internal control report to contain a assessment of the effectiveness of the companyʹs internal control structure and procedures. A) TRUE B) FALSE
A) TRUE
The CEO and CFO must prepare a statement to accompany the audit report to certify that the company's reported financial statements are presented fairly in all material aspects A) TRUE B) FALSE
A) TRUE
The chief goal of an information system is productivity A) TRUE B) FALSE
A) TRUE
The vendor is notified when a discrepancy is found between the items received and the purchase order A) TRUE B) FALSE
A) TRUE
To comply with SOX, companies must use a framework for evaluating internal controls A) TRUE B) FALSE
A) TRUE
Typically, vendors mail the bill separately from the items shipped A) TRUE B) FALSE
A) TRUE
When customizing an accounting system, order in which work is performed must be considered A) TRUE B) FALSE
A) TRUE
When using the big bang approach, timing of the implementation can play a crucial role in its success A) TRUE B) FALSE
A) TRUE
While COSO is a bread framework for internal control in general, COBIT provides the detailed IT processes necessary to provide IT controls for monitoring and evaluating the IT environment A) TRUE B) FALSE
A) TRUE
What documents typically accompany the physical shipment of goods to a customer? A) The packing list and a bill of lading B) Packing and picking lists C) The picking list and purchase order D) The sales order and an invoice
A) The packing list and a bill of lading
The Omnibus Trade and Competitiveness Act of 1988 (OTCA) amends the A) accounting and antibribery provisions of the FCPA B) Securities Exchange Act of 1934 C) antibribery provisions of the FCPA D) accounting provisions of the FCPA
A) accounting and antibribery provisions of the FCPA
The component of internal control that is the foundation for all other components is ________. A) control environment B) control activities C) information and communication D) risk assessment
A) control environment
To reduce the possibility of losing data during processing, the FIRST point at which control totals should be implemented is: A) during data preparation. B) in transit to the computer. C) between related computer runs. D) during the return of the data to the user department.
A) during data preparation.
Intentional or reckless conduct, whether intentional or not, and which results in materially misleading financial statements, is called A) fraudulent financial reporting B) corporate crime C) None of these answers are correct D) management fraud
A) fraudulent financial reporting
Many aspects of computer processing tend to significantly A) increase an organization's exposure to undesirable events B) strengthen the corporate culture's ethical behavior in the long-term analysis C) increase employee productivity through the use of monitoring software D) decrease an organization's exposure to undesirable events
A) increase an organization's exposure to undesirable events
A warehouse employee uses a document to fulfill a customer order. The employee is most likely using a: A) picking list B) packing list C) bill of lading D) shipping advice
A) picking list
The document(s) which accounts payable should use to verify a purchase transaction is (are) A) purchase requisition, invoice, receiving report, and purchase order. B) receiving report and purchase order. C) invoice, purchase requisition, and purchase order. D) purchase requisition, receiving report, and invoice.
A) purchase requisition, invoice, receiving report, and purchase order.
As business processes for a new system are planned, workflow management is not considered A) TRUE B) FALSE
B) FALSE
As business processes for a new system are planned, workflow management is not considered. A) TRUE B) FALSE
B) FALSE
Physical theft is only a minor threat to the solvency of most business organizations A) TRUE B) FALSE
B) FALSE
Audit committees are usually charged with evaluation and assessment of a corporation's internal control processes A) TRUE B) FALSE
B) FALSE
By changing business processes to match the baseline system, a company can expect to increase the need for custom programming. A) TRUE B) FALSE
B) FALSE
Controls increase productivity and the reliability of resulting output A) TRUE B) FALSE
B) FALSE
Input controls ensure data is processed properly. A) TRUE B) FALSE
B) FALSE
It is not possible for a material weakness in internal control over financial reporting to exist even though the financial statements are not materially misstated A) TRUE B) FALSE
B) FALSE
Payroll consists of printing payroll checks and paying payroll liabilities A) TRUE B) FALSE
B) FALSE
Physical controls ensure appropriate information processing, authorization, and data integrity A) TRUE B) FALSE
B) FALSE
Which general IT control covers acquisition, implementation, and maintenance of system software including the operating system, DBMS, network software, and security software? A) Access security controls B) Computer operations controls C) Program change controls D) Program development controls
B) Computer operations controls
20) The internal control category control environment includes identifying, analyzing, and managing risks affecting the ability to report financial data properly. A) TRUE B) FALSE
B) FALSE
When receiving inventory, which table is usually not used? A) Vendor table B) Cash Account table C) Item table D) Purchase Order table
B) Cash Account table
Approval (authorization) limits the initiation of a transaction or performance of an activity to selected individuals A) TRUE B) FALSE
B) FALSE
An effective internal accounting control measure that protects against the preparation of improper or inaccurate disbursements would be to require that all checks be A) reviewed by the treasurer before mailing B) signed by an officer after necessary supporting evidence has been examined C) performed or otherwise effectively canceled when they are returned with the bank statement D) numbered sequentially and accounted for by internal auditors
B) signed by an officer after necessary supporting evidence has been examined
Mailing disbursement checks and remittance advices should be controlled by the employee who A) matches the receiving reports, purchase orders, and vendor's invoices B) signs the checks last C) approves the vouchers for payment D) maintains possession of the mechanical check-signing device
B) signs the checks last
What percentage for frauds are detected by tips? A) 33% B) 36% C) 46% D) 56%
C) 46%
The customization approach that involves the system going ʺliveʺ all at once is called A) Stages B) Workflow management C) Big bang D) Gap analysis
C) Big bang
Identifying transaction documents to prevent their further or repeated use after they have performed their function is known as A) Endorsement B) Blocking C) Cancellation D) Restriction
C) Cancellation
Which of the following types of data validation editing checks is used to determine if a field contains data, and not zeros or blanks? A) Check digit B) Existence check C) Completeness check D) Reasonableness check
C) Completeness check
Earnings management focuses on managing when revenues and expenses are recorded in order to favorably reflect a company's financial performance in a(n) ________ A) illegal manner B) Vague manner C) Legal manner D) Questionable manner
C) Legal manner
The financial modules usually includes the following events except A) Make correcting entries B) Make adjusting entries C) Pay interest expense D) Make closing entries
C) Pay interest expense
Which one of the following is not an element of the internal control process? A) Control environment B) Risk assessment C) Risk response D) Monitoring
C) Risk response
Which of the items below would not be considered a possible common exposure for a corporation? A) Certain equipment was accidently misplaced and not depreciated B) A flash flood destroys the merchandise contained in a warehouse C) The corporation never was billed for a sale of merchandise shipped to a customer D) Excessive prices are paid for goods for use in the organization
C) The corporation never was billed for a sale of merchandise shipped to a customer
Which of the objectives listed below is not considered part of the internal control process? A) Compliance with applicable laws and regulations B) Effectiveness and efficiency of operations C) The prevention of fraud and embezzlement D) Reliability of financial reporting
C) The prevention of fraud and embezzlement
The Create Purchase Orders, Receive Items, and Enter Bills are in which baseline accounting system? A) Banking B) Customer C) Vendor D) Reporting
C) Vendor
The authority to accept incoming goods in receiving should be based on a(n) A) vendor's invoice B) materials requisition C) approved purchase order D) bill of lading
C) approved purchase order
The function responsible for forwarding voucher checks directly to payees is ________. A) internal audit B) purchasing C) cash disbursements D) accounts payable
C) cash disbursements
An essential input field that should contain data is empty. The data edit control that would detect this error is a ________. A) sequence check B) limit check C) completeness check D) hash total check
C) completeness check
DWB Corporation suffered a loss due to the spoilage of certain raw materials used in the manufacturing of its products. The business transaction cycle in which this loss occurred is the A) expenditure cycle B) revenue cycle C) production cycle D) finance cycle
C) production cycle
Which of the following is not an objective of internal control? A) Reliability of financial reporting B) effectiveness and efficiency of operations C) relevance of financial statements D) compliance with applicable laws and regulations
C) relevance of financial statements
When recording a customer payment, which table is usually not used? A) Customer table B) Sales Order table C) Sales Order Line table D) Cash Receipts table
D) Cash Receipts table
The big bang approach to customization involves A) Customizing and installing one module at a time B) Piloting modules, testing, and resolving issues before moving on the next subsystem C) Resolving issues on a small scale D) Customizing and installing all the modules for the company at the same time
D) Customizing and installing all the modules for the company at the same time
Which table would be used when processing a purchase order? A) Employee table B) Customer table C) Invoice Line table D) Item table
D) Item table
The COSO internal control component Information and Communication usually maps to which COBIT domain for IT processes? A) PO9 Asses and manage IT risks B) PO4 Define the IT processes, organization, and relationships C) PO1 Define a strategic IT plan D) PO2 Define the information architecture
D) PO2 Define the information architecture
Which of the following is not part of the audit committee's responsibilities? A) The organization's compliance with legal and regulatory requirements B) The integrity of the organization's financial statements and reports C) The organization's policies regarding ethical conduct D) The organization's ability to process data efficiently and effectively
D) The organization's ability to process data efficiently and effectively
Which of the following is not part of the audit committee's responsibility? A) The integrity of the organization's financial statements and reports. B) The organization's policies regarding ethical conduct C) The organization's compliance with legal and regulatory requirements D) The organization's ability to process data efficiently and effectively
D) The organization's ability to process data efficiently and effectively
Section 102 of the Federal Foreign Corrupt Practices Act of 1977 (FCPA) applies to A) any publicly held company, whether it is a for-profit or non-profit entity B) all public and privately held U.S based companies C) all foreign-owned companies currently operating in the United States D) all companies subject to the Securities Exchange Act of 1934
D) all companies subject to the Securities Exchange Act of 1934
The three types of functions that normally should be segregated to promote internal control are A) recording transactions, authorizing transactions, and approval. B) authorizing transactions, inputting data, and outputting data. C) authorizing transactions, approving transactions, and custody of assets. D) authorizing transactions, recording transactions, and custody of assets.
D) authorizing transactions, recording transactions, and custody of assets.
A proposed transaction processing application will have many data capture sources and outputs in paper and electronic form. To ensure that transactions are not lost during processing, an IS auditor should recommend the inclusion of: A) validation controls. B) internal credibility checks. C) clerical control procedures. D) automated systems balancing.
D) automated systems balancing.
Application controls are often classified as A) basic, specific, and accounting. B) general, application, and output. C) general, processing, and specific. D) input, processing, and output.
D) input, processing, and output.
