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.