Question 1

This type of software alerts the organization to hacking or other unauthorized use of the system or network.
A)Penetration testing
B)Intrusion detection
C)Integrity testing
D)Vulnerability testing

Accepted Answer

Intrusion detection

Question 2

The examination of the system to determine the adequacy of security measures and to identify security deficiencies is called:
A)Intrusion detection
B)Penetration testing
C)Vulnerability testing
D)Integrity testing

Accepted Answer

Vulnerability testing

Question 3

In order to help safeguard the security and confidentiality in an electronic business environment, a company should implement controls such as user ID, password, log-in procedures, access levels, and authority tables in order to reduce the risk of:
A)Unauthorized access
B)Incomplete audit trail
C)Virus and worm attacks
D)Repudiation of purchase transactions

Accepted Answer

Unauthorized access

Question 4

The purchasing process starts when the purchase invoice is submitted by the vendor.

Accepted Answer

The purchasing process typically starts when a need is identified and a purchase requisition is created, not when the purchase invoice is submitted by the vendor.

Question 5

A purchase requisition is essentially an internal document, one that does not go outside the company, whereas a purchase order is an external document, which will be presented to an entity outside the company.

Accepted Answer

A purchase requisition is created within the company to request the purchase of goods or services, whereas a purchase order is issued by a company to a supplier to confirm the purchase of goods or services. Therefore, a purchase requisition is an internal document that is not shared externally, while a purchase order is an external document shared outside the company.

Question 6

Companies in the same line of business are not likely to have many differences in their purchasing habits.

Accepted Answer

Companies in the same line of business may have differences in their purchasing habits depending on factors such as size, location, target market, and business strategy.

Question 7

Which of the following groups has an ethical obligation to establish the proper tone at the top, strong internal controls, and high ethical standards?
A)Stockholders
B)Board of Directors and Management
C)Employees
D)Audit Committee

Accepted Answer

Board of Directors and Management

Question 8

A purchase order is essentially an internal document, one that does not go outside the company, whereas a purchase requisition is an external document, which will be presented to an entity outside the company.

Accepted Answer

The statement is incorrect. A purchase requisition is an internal document that requests for goods or services to be purchased, while a purchase order is the external document that is sent to the supplier or vendor to initiate the actual purchase.

Question 9

There are four primary functions of corporate governance.Which of the following is NOT one of those functions?
A)Availability
B)Management Oversight
C)Internal Controls and Compliance
D)Financial Stewardship
TEST BANK - CHAPTER 9 - TRUE / FALSE

Accepted Answer

Availability

Question 10

When the company is a vendor, goods flow into the company and cash is paid out.

Accepted Answer

When a company is a vendor, it provides goods or services to other companies. In this case, goods flow out of the company, and cash is received in exchange.

Question 11

Intentionally attempting to circumvent IT system access controls to determine whether there are weaknesses in any controls is called:
A)Penetration testing
B)Intrusion detection
C)Integrity testing
D)Vulnerability testing

Accepted Answer

Penetration testing

Question 12

In order to help safeguard the processing integrity in an electronic business environment, a company should implement input controls such as field check, validity check, limit check, reasonableness check, and computer logs in order to reduce the risk of:
A)Worm attacks
B)Hackers
C)Unauthorized access
D)Invalid data entry

Accepted Answer

Invalid data entry

Question 13

Credit cards given to employees by the organization in order for the employees to make designated purchases are called:
A)Employee Debit Cards
B)Organization Purchase Cards
C)Expenditure Cards
D)Procurement Cards

Accepted Answer

Procurement Cards

Question 14

The security and confidentiality risks of computer based matching would include:
A)Unauthorized access to the system's ordering and matching functions would allow the insertion of fictitious vendors and / or invoices.
B)Errors in system logic can cause systematic and repetitive errors in matching.
C)The criteria used to identify duplicate payments may be too tightly defined and will overlook duplicate payments.
D)System breakdowns or interruptions can stop or slow the processing of invoices and payments.

Accepted Answer

Unauthorized access to the system's ordering and matching functions would allow the insertion of fictitious vendors and / or invoices.

Question 15

In order to help safeguard the availability in an electronic business environment, a company should implement controls such as business continuity planning, backup data and systems, in order to reduce the risk of:
A)Unauthorized access
B)System failures
C)Repudiation of purchase transactions
D)Invalid data entry

Accepted Answer

System failures

Question 16

Even though a company has an obligation to pay for goods as soon as the goods are received, it is common to not record the actual liability until the invoice is received.

Accepted Answer

In practice, many companies record liabilities when the invoice is received because it provides a clear, documented amount and due date, even though the obligation technically arises when the goods are received.

Question 17

The use of a blind purchase order forces the receiving clerk to perform an independent check of the quantity and quality of the delivery.

Accepted Answer

A blind purchase order does not contain any specifications or details about the product being ordered. Therefore, the receiving clerk cannot rely on the purchase order to verify the quantity and quality of the delivery. Instead, they must independently check the delivery to make sure it meets the necessary standards. This helps to prevent errors, misconduct, and fraud in the purchasing process.

Question 18

A company is not obligated to pay for goods until 30 days after the goods are received.

Accepted Answer

A company may have different payment terms negotiated with their suppliers, but they are generally expected to pay for goods within a reasonable time frame, typically within 30 days of receipt unless otherwise agreed upon. However, there is no legal obligation for a company to pay for goods exactly 30 days after they are received.

Question 19

One of the newest technologies related to payables is one where invoices are exchanged and payments are made via the internet.The name given to this process is:
A)Random Array of Invoice and Disbursements RAID)
B)Electronic Invoice Payment Procedures EIPP)
C)Electronic Invoice Presentment and Payment EIPP)
D)Routing Application Invoice Delivery RAID)

Accepted Answer

Electronic Invoice Presentment and Payment EIPP )

Question 20

This type of system matching takes place without invoices.The receipt of goods is carefully evaluated an, if it matches the purchase order, settlement of the obligation occurs through the system.
A)Business Process Engineering
B)Controlled Access Invoicing
C)Evaluated Receipt Settlement
D)Double Matching System

Accepted Answer

Evaluated Receipt Settlement

Quiz 9: Expenditures Processes and Controls - Purchases

This type of software alerts the organization to hacking or other unauthorized use of the system or network.

The examination of the system to determine the adequacy of security measures and to identify security deficiencies is called:

In order to help safeguard the security and confidentiality in an electronic business environment, a company should implement controls such as user ID, password, log-in procedures, access levels, and authority tables in order to reduce the risk of:

The purchasing process starts when the purchase invoice is submitted by the vendor.

A purchase requisition is essentially an internal document, one that does not go outside the company, whereas a purchase order is an external document, which will be presented to an entity outside the company.

Companies in the same line of business are not likely to have many differences in their purchasing habits.

Which of the following groups has an ethical obligation to establish the proper tone at the top, strong internal controls, and high ethical standards?

A purchase order is essentially an internal document, one that does not go outside the company, whereas a purchase requisition is an external document, which will be presented to an entity outside the company.

There are four primary functions of corporate governance.Which of the following is NOT one of those functions?

When the company is a vendor, goods flow into the company and cash is paid out.

Intentionally attempting to circumvent IT system access controls to determine whether there are weaknesses in any controls is called:

In order to help safeguard the processing integrity in an electronic business environment, a company should implement input controls such as field check, validity check, limit check, reasonableness check, and computer logs in order to reduce the risk of:

Credit cards given to employees by the organization in order for the employees to make designated purchases are called:

The security and confidentiality risks of computer based matching would include:

In order to help safeguard the availability in an electronic business environment, a company should implement controls such as business continuity planning, backup data and systems, in order to reduce the risk of:

Even though a company has an obligation to pay for goods as soon as the goods are received, it is common to not record the actual liability until the invoice is received.

The use of a blind purchase order forces the receiving clerk to perform an independent check of the quantity and quality of the delivery.

A company is not obligated to pay for goods until 30 days after the goods are received.

One of the newest technologies related to payables is one where invoices are exchanged and payments are made via the internet.The name given to this process is:

This type of system matching takes place without invoices.The receipt of goods is carefully evaluated an, if it matches the purchase order, settlement of the obligation occurs through the system.