Question 1

Which of the following is an independent check on performance?
A) The Purchasing Agent physically reviews the contents of shipments and compares them with the purchase orders he has placed.
B) Production teams perform quality evaluations of the products that they produce.
C) The General Manager compares budgeted amounts with expenditure records from all departments.
D) Petty cash is disbursed by Fred Haynes. He also maintains records of disbursements, places requests to finance to replace expended funds, and periodically reconciles the petty cash balance.

Accepted Answer

The General Manager comparing budgeted amounts with expenditure records is an independent check on performance as it is someone in a high-level position reviewing the overall financial performance of the organization rather than someone directly involved in the day-to-day operations. The other options involve individuals or teams involved in the operations or handling of funds, which are not independent checks.

Question 2

A ________ is created to guide and oversee systems development and acquisition.
A) performance evaluation
B) project development plan
C) steering committee
D) strategic master plan

Accepted Answer

A steering committee is typically created to guide and oversee systems development and acquisition. The committee is usually composed of high-level stakeholders from various areas within the organization, such as IT, finance, and operations. The steering committee is responsible for providing direction and making critical decisions related to the development and implementation of systems in the organization.

Question 3

Which type of audit assesses employee compliance with management policies and procedures?
A) external audit
B) internal audit
C) network security audit
D) all of the above

Accepted Answer

Internal Audit. An internal audit is conducted by an organization's own staff to assess compliance with management policies and procedures, as well as identify areas for improvement. External audits are conducted by independent third parties, while network security audits specifically assess an organization's IT security measures.

Question 4

The organization chart for Renata Corporation includes a controller and an information processing manager,both of whom report to the vice president of finance.Which of the following would be a control weakness?
A) assigning the programming and operating of the computer system to an independent control group which reports to the controller
B) providing for maintenance of input data controls by an independent control group which reports to the controller
C) periodically rotating assignment of application processing among machine operators, who all report to the information processing manager
D) providing for review and distribution of system-generated reports by an independent control group which reports to the controller

Accepted Answer

Assigning both programming and operating of the computer system to a group that reports to the controller can lead to a conflict of interest and lack of segregation of duties, which is a control weakness.

Question 5

Which component of the COSO Enterprise Risk Management Integrated Framework is concerned with understanding how transactions are initiated,data are captured and processed,and information is reported?
A) information and communication
B) internal environment
C) event identification
D) objective setting

Accepted Answer

The information and communication component of the COSO ERM Integrated Framework is concerned with understanding how transactions are initiated, data are captured and processed, and information is reported. It encompasses the policies and procedures for communication and information sharing throughout the organization, as well as the systems used to capture and report data.

Question 6

Which of the following is not an example of something monitored by a responsibility accounting system?
A) budgets
B) quotas
C) vendor analysis
D) quality standards

Accepted Answer

Responsibility accounting systems are designed to monitor the performance of individuals, departments, or business units in achieving specific goals or objectives. Budgets, quotas, and quality standards are commonly monitored by responsibility accounting systems, as they pertain to financial and operational performance. Vendor analysis, on the other hand, is typically not monitored by a responsibility accounting system, as it is a procurement activity that involves selecting and evaluating suppliers.

Question 7

Describe the differences between general and specific authorization.

Accepted Answer

The answer of Describe the differences between general and specific...

Question 8

To ensure compliance with copyrights and to protect itself from software piracy lawsuits,companies should ________.
A) periodically conduct software audits
B) update the operating system frequently
C) buy software from legitimate suppliers
D) adopt cloud operating platforms

Accepted Answer

The answer of To ensure compliance with copyrights and to...

Question 9

Which of the following factors is not a reason forensic investigators are increasingly used in accounting?
A) the Sarbanes-Oxley Act
B) new accounting rules
C) audit fee increases
D) pressure from boards of directors

Accepted Answer

Audit fee increases are not a reason for the increasing use of forensic investigators in accounting. The other factors listed, such as the Sarbanes-Oxley Act, new accounting rules, and pressure from boards of directors, are all factors that have contributed to the increasing use of forensic investigators.

Question 10

Petty cash is disbursed by the Manuela Luisina in the Cashier's Office.Manuela also maintains records of disbursements,places requests to the Finance Department to replace expended funds,and periodically reconciles the petty cash balance.This represents a(n)________ segregation of duties.
A) ideal
B) effective
C) ineffective
D) limited

Accepted Answer

Having the same individual handle disbursement, record-keeping, fund replenishment requests, and reconciliation does not effectively segregate duties, increasing the risk of errors or fraud.

Question 11

Which of the following is not a key method of monitoring performance?
A) performing internal control evaluation
B) employing a chief risk officer
C) implementing effective supervision
D) monitoring system activities

Accepted Answer

While employing a chief risk officer may aid in managing risk, it is not necessarily a key method of monitoring performance. The other options (performing internal control evaluation, implementing effective supervision, and monitoring system activities) are all important methods of monitoring performance.

Question 12

Which type of audits can detect fraud and errors?
A) external audits
B) internal audits
C) network security audits
D) all of the above

Accepted Answer

All types of audits, including external, internal, and network security audits, can potentially detect fraud and errors as they involve examining and verifying records and processes.

Question 13

COSO requires that any internal deficiencies identified through monitoring be reported to whom?
A) the external auditor
B) appropriate federal, state, or local authorities
C) the board of directors
D) the audit committee

Accepted Answer

COSO requires that any internal deficiencies identified through monitoring be reported to the board of directors.

Question 14

Hiring decisions at Maarja's Razors are made by Maimu Maarja,the Director of Human Resources.Pay rates are approved by the Vice President for Operations.At the end of each pay period,supervisors submit time cards to Kasheena,who prepares paycheck requisitions.Paychecks are then distributed through the company's mail room.This represents a(n)________ segregation of duties.
A) partial
B) effective
C) ineffective
D) limited

Accepted Answer

This represents an effective segregation of duties as different individuals are responsible for different aspects of the payroll process, reducing the risk of errors or fraud being committed. Maimu Maarja makes the hiring decisions, the Vice President for Operations approves pay rates, and Kasheena prepares paycheck requisitions. Additionally, the mail room distributes paychecks. All of these steps create a system of checks and balances, ensuring that no one person has complete control over the payroll process.

Question 15

Which of the following is not a principle related to information and communicating in the updated COSO Integrated Control framework?
A) Communicate relevant internal control matters to external parties.
B) Obtain or generate relevant, high-quality information to support internal control.
C) Surround internal control processes with information technology that enables discrepancies to be identified.
D) Internally communicate the information necessary to support the other components of internal control.

Accepted Answer

The updated COSO Integrated Control framework emphasizes the importance of communication and information in supporting internal control but does not specifically mandate surrounding internal control processes with information technology for identifying discrepancies. This choice does not accurately reflect the principles related to information and communication as outlined in the framework.

Question 16

A ________ shows how a project will be completed,including tasks and who will perform them as well as a timeline and cost estimates.
A) performance evaluation
B) project development plan
C) steering committee
D) strategic master plan

Accepted Answer

A project development plan outlines the tasks required to complete a project, who will perform them, and estimates the timeline and cost of each task. This plan is essential for keeping the project on track and ensuring that all team members are on the same page about what needs to be done. A performance evaluation is a review of an individual or team's job performance, a steering committee is a group of people who provide guidance and advice on a project, and a strategic master plan outlines long-term goals and objectives for an organization.

Question 17

The Director of Information Technology for the city of Tampa,Florida formed a company to sell computer supplies and software.All purchases made on behalf of the City were made from her company.She was later charged with fraud for overcharging the City,but was not convicted by a jury.The control issue in this case arose because the Director had both ________ and ________ duties.
A) custody; authorization
B) custody; recording
C) recording; authorization
D) management; custody

Accepted Answer

The control issue in this case arose because the Director had both recording and authorization duties. As the Director of Information Technology, she was responsible for recording purchases made on behalf of the City, and as the owner of the company selling computer supplies and software, she had authority to make those purchases. This created a conflict of interest and allowed her to overcharge the City, which is why she was charged with fraud.

Question 18

A document that shows all projects that must be completed and the related IT needs in order to achieve long-range company goals is known as a
A) performance evaluation.
B) project development plan.
C) data processing schedule.
D) strategic master plan.

Accepted Answer

A strategic master plan is a comprehensive document that outlines a company's long-range goals and strategies for achieving them, including all necessary projects and IT needs. A performance evaluation is an assessment of individual or team performance, a project development plan outlines the steps needed to complete a specific project, and a data processing schedule is a plan for processing and managing data within a specific time frame.

Question 19

Explain how a company could be the victim of fraud,even if ideal segregation of duties is enforced.

Accepted Answer

The answer of Explain how a company could be the...

Question 20

A neural network is a software program that has
A) the ability to read text.
B) the ability to learn.
C) the capability to extract information from an individual's brain.
D) the capability to inject information into an individual's brain.

Accepted Answer

A neural network is a software program designed to mimic the way the human brain works, with the ability to learn through training data and improve its performance over time. It does not have the capability to read or extract/ inject information directly from or into an individual's brain.

Quiz 7: Control and Accounting Information Systems

Which of the following is an independent check on performance?

A ________ is created to guide and oversee systems development and acquisition.

Which type of audit assesses employee compliance with management policies and procedures?

The organization chart for Renata Corporation includes a controller and an information processing manager,both of whom report to the vice president of finance.Which of the following would be a control weakness?

Which component of the COSO Enterprise Risk Management Integrated Framework is concerned with understanding how transactions are initiated,data are captured and processed,and information is reported?

Which of the following is not an example of something monitored by a responsibility accounting system?

Describe the differences between general and specific authorization.

To ensure compliance with copyrights and to protect itself from software piracy lawsuits,companies should ________.

Which of the following factors is not a reason forensic investigators are increasingly used in accounting?

Petty cash is disbursed by the Manuela Luisina in the Cashier's Office.Manuela also maintains records of disbursements,places requests to the Finance Department to replace expended funds,and periodically reconciles the petty cash balance.This represents a(n) ________ segregation of duties.

Which of the following is not a key method of monitoring performance?

Which type of audits can detect fraud and errors?

COSO requires that any internal deficiencies identified through monitoring be reported to whom?

Which of the following is not a principle related to information and communicating in the updated COSO Integrated Control framework?

A ________ shows how a project will be completed,including tasks and who will perform them as well as a timeline and cost estimates.

A document that shows all projects that must be completed and the related IT needs in order to achieve long-range company goals is known as a

Explain how a company could be the victim of fraud,even if ideal segregation of duties is enforced.

A neural network is a software program that has