Question 1

The control environment related to the fixed asset processes can be enhanced through the implementation of various access controls, such as:
A)Passwords
B)Number of employees who have access to the system
C)Limits on the number of computer workstations where information may be entered
D)All of the above

Accepted Answer

All of the mentioned access controls can contribute to enhancing the control environment related to fixed asset processes. Passwords can limit access only to authorized individuals, while limiting the number of employees who have access to the system can reduce the risk of fraud or mistakes. Additionally, placing limits on the number of computer workstations where information may be entered can further control access to the system and reduce the risk of unauthorized changes to fixed asset records. Combining these access controls can help create a more secure and controlled environment for fixed asset processes.

Question 2

Explain the various reconciliation procedures that should occur in payroll.

Accepted Answer

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Question 3

The internal control process of computing and recording the gains/losses for all fixed asset disposals will minimize the risk of:
A)Omitted transactions
B)Stolen goods
C)Fraudulent acquisitions
D)Invalid vendors

Accepted Answer

The internal control process of computing and recording the gains/losses for all fixed asset disposals will minimize the risk of omitted transactions, which refers to transactions that are unintentionally left out of the accounting system. This internal control process does not address the risks of stolen goods, fraudulent acquisitions, or invalid vendors.

Question 4

Explain why and how duties are segregated in the payroll process

Accepted Answer

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Question 5

The shortcomings of a spreadsheet-based system include all of the following, except:
A)The design of spreadsheets is very time consuming
B)The abundance of fixed asset data
C)It is difficult to apply varying depreciation policies within spreadsheets
D)It is difficult to establish an audit trail with spreadsheets

Accepted Answer

The abundance of fixed asset data is not a shortcoming of a spreadsheet-based system. The other choices are all valid shortcomings.

Question 6

Clues that a ghost employee may exist in the company would include all of the following, except:
A)Payroll register identifies paychecks without adequate tax withholdings.
B)The personnel file contains no duplicate addresses. 
C)Payroll expenses are over budget.
D)Paychecks were not claimed when the paymaster distributed them.

Accepted Answer

The other clues suggest that there may be an unauthorized employee receiving paychecks, while having no duplicate addresses in personnel files does not necessarily indicate the presence of a ghost employee.

Question 7

For each transaction cycle and each type of transaction, there are internal controls that help to minimize certain risk to the company.Using the terminology and framework developed in the text, describe the following for the fixed asset process.

Accepted Answer

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Question 8

For each transaction cycle and each type of transaction, there are internal controls that help to minimize certain risk to the company.Using the terminology and framework developed in the text, describe the following for the Payroll Process cycle.

Accepted Answer

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Question 9

An entity who receives a paycheck, but who does not actually work for the company is called:
A)Ghost employee
B)Shell employee
C)Abundant employee
D)Absent employee

Accepted Answer

A ghost employee is someone who appears on the payroll but does not actually work for the company. It can be a result of payroll fraud, where an employee or someone outside the company creates a fake employee and collects their paycheck. A shell employee, abundant employee, or absent employee do not accurately describe this situation.

Question 10

Most companies can justify the use of specialized asset management software programs instead of the spreadsheets or traditional manual systems for all of the following reasons, except:
A)The abundance of fixed asset data
B)The time-consuming and tedious requirements for tracking changes
C)The number of different methods of accounting for depreciation
D)The intricacy of the tax laws

Accepted Answer

The number of different methods of accounting for depreciation is not a primary reason for using specialized asset management software, as these methods can often be handled adequately with spreadsheets or manual systems. The other options highlight complexities that are better managed with specialized software.

Question 11

There are a number of ways that frauds may be carried out to try to receive excess compensation.Which of the following is not one of those methods?
A)Exaggeration of hours worked
B)Falsification of overtime or holiday time worked, payable at a higher rate
C)Understatement of job related expenses
D)Falsification of sales in order to increase commission payouts

Accepted Answer

The other options listed are all methods that fraudsters could use to receive excess compensation. Understatement of job-related expenses would result in lower compensation, so it would not be a method used for excess compensation.

Question 12

The internal control process of requiring physical controls in place in areas where fixed assets are held, will help to minimize the risk of:
A)Incorrect amounts
B)Lost or stolen assets
C)Duplicate transactions
D)Omitted transactions

Accepted Answer

Requiring physical controls in areas where fixed assets are held helps to minimize the risk of lost or stolen assets. It does not directly address the risk of incorrect amounts, duplicate transactions, or omitted transactions.

Question 13

The internal control process of requiring the check of the fixed asset subsidiary ledger and depreciation schedule for mathematical accuracy and agreement with authorized documentation, will help to minimize the risk of:
A)Incorrect amounts
B)Lost or stolen assets
C)Duplicate transactions
D)Omitted transactions

Accepted Answer

This process ensures that the calculations and records for fixed assets and depreciation are accurate, directly addressing the risk of incorrect amounts being reported.

Question 14

Factors that indicate the need for internal controls over fixed assets processes include all of the following, except:
A)General nature of fixed assets makes the susceptible to theft because they are distributed throughout the business and are in the hands of many
B)Large quantities of fixed assets
C)High likelihood of obsolescence due to technological changes 
D)The high cost of assets

Accepted Answer

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Question 15

Explain the ways in which electronic transfer of funds and direct deposit can improve payroll processes.

Accepted Answer

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Quiz 10: Expenditures Processes and Controlspayroll and Fixed Assets

The control environment related to the fixed asset processes can be enhanced through the implementation of various access controls, such as:

Explain the various reconciliation procedures that should occur in payroll.

The internal control process of computing and recording the gains/losses for all fixed asset disposals will minimize the risk of:

Explain why and how duties are segregated in the payroll process

The shortcomings of a spreadsheet-based system include all of the following, except:

Clues that a ghost employee may exist in the company would include all of the following, except:

For each transaction cycle and each type of transaction, there are internal controls that help to minimize certain risk to the company.Using the terminology and framework developed in the text, describe the following for the fixed asset process.

For each transaction cycle and each type of transaction, there are internal controls that help to minimize certain risk to the company.Using the terminology and framework developed in the text, describe the following for the Payroll Process cycle.

An entity who receives a paycheck, but who does not actually work for the company is called:

Most companies can justify the use of specialized asset management software programs instead of the spreadsheets or traditional manual systems for all of the following reasons, except:

There are a number of ways that frauds may be carried out to try to receive excess compensation.Which of the following is not one of those methods?

The internal control process of requiring physical controls in place in areas where fixed assets are held, will help to minimize the risk of:

The internal control process of requiring the check of the fixed asset subsidiary ledger and depreciation schedule for mathematical accuracy and agreement with authorized documentation, will help to minimize the risk of:

Factors that indicate the need for internal controls over fixed assets processes include all of the following, except:

Explain the ways in which electronic transfer of funds and direct deposit can improve payroll processes.