Practice Questions, Question 11 From the dropdown menu, select the appropriate control activity that corresponds with the description provided. Control Activity Descriptions 1. Include reviews of actual performance versus budgets, forecasts, and prior-period performance. By investigating unexpected results or unusual trends, management identifies circumstances where the underlying activity objectives are in danger of not being achieved. Can be manual controls; automated controls (that is, application dependent); manual controls dependent on an automated process (that is, IT dependent); or IT general controls (ITGCs). 2. Account Reconciliation Segregation of Incompatible Duties Authorization Controls Information Processing Physical Controls Performance Reviews 3. Approval should be required before any expenditure is made, including the hiring of employees, the ordering of goods and services, and the ability to extend credit. 4. Bank accounts, intercompany accounts, and any clearing and suspense accounts should be reconciled on a regular basis. Encompass the physical security of assets, including adequate safeguards over access to assets and records (such as secured facilities and authorization for access to computer programs and data fi les) and periodic counting and comparison with amounts shown on control records. Encompasses the concept that no one employee or group of employees should be in a position to both perpetrate and hide errors or fraud in the normal course of their duties. 5. 6