Question

1. Which of the following is not normally included in an internal control report?
a. An assessment of the effectiveness of internal control
b. A statement that it is management's responsibility to establish the internal control structure and procedures for financial reporting
c. A statement that it is management's responsibility to maintain the internal control structure and procedures for financial reporting
d. Suggestions on how the company can improve the internal control structure
2. Which of the following is not true of the Sarbanes-Oxley Act?
a. It required an internal control report
b. It was passed after many major corporations failed as a result of fraudulent activity
c. It required that management obtain an audit of internal control
d. It sought to restore management's confidence over financial reporting
3. "Tone at the top" is a phrase used to describe which component of internal control?
a. Control Environment
b. Monitoring
c. Control Activities
d. Information and Communication
4. Which of the following is not an example of a good control activity?
a. Establishing responsibility for the performance of a given task
b. Using computer passwords and encryption
c. Having the same employee receive and pay for merchandise
d. Using sequentially numbered sales invoices
5. Internal control systems are limited in their effectiveness by:
a. the human element.
b. cost-benefit analysis.
c. both a and b.
d. neither a nor b.
6. Which of the following would you see on a reconciliation of the bank balance to the actual cash balance?
a. Outstanding check
b. NSF check
c. Bank service fee
d. Collection of a receivable
7. Which of the following would you most likely see on a reconciliation of the book balance to the actual cash balance?
a. Deposit in transit
b. Collection of interest
c. Outstanding check
d. None of the above


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  • CreatedJuly 16, 2015
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