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Exam 11: Ais and Internal Controls

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Question 31

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Which of the following is not one of the responses to risk presented in COSO ERM? A. Share the risk. B. Accept the risk. C. Delegate the risk. D. Reduce the risk.

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Question 32

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Which of the following items is one of the eight components of COSO's enterprise risk management framework? A. Operations. B. Reporting. C. Monitoring. D. Compliance.

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Question 33

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According to the Sarbanes-Oxley Act of 2002, it is the responsibility of the Board of Directors to establish and maintain the effectiveness of internal control.

The Sarbanes-Oxley Act of 2002 (SOX) 2002 requires the management of all companies and their auditors to assess and report on the design and effectiveness of internal control over financial reporting annually.

According to COSO, which of the following components of the enterprise risk management addresses an entity's integrity and ethical values? A. Information and communication B. Internal environment. C. Risk assessment. D. Control activities.

According to COSO which of the following is not a component of internal control? A. Control risk. B. Control activities. C. Monitoring. D. Control environment.

The ISO 27000 Series of standards are designed to address which of the following? A. Corporate governance. B. Internal controls. C. Information security issues. D. IT value.

The IT Infrastructure Libarary (ITIL) is considered a de facto standard in which of the following regions? A. Asia and Australia. B. North America. C. The UK. D. Europe.

Which of the following provides the advantage of incorporating other widely accepted standards and frameworks? A. ITIL. B. COBIT 5. C. COSO 2013. D. ISO 27000.

Which of the following represents an inherent limitation of internal controls? A. Bank reconciliations are not performed on a timely basis. B. The CEO can request a check with no purchase order. C. Customer credit check not performed. D. Shipping documents are not matched to sales invoices.

Which of the following best describes why firms choose to create codes of ethics? A. Because most people will not behave ethically without a written set of guidelines. B. Codes of ethics protect firms against lawsuits that may be filed due to corporate fraud. C. They allow firms to create a formal set of expectations for employees who may have different sets of personal values. D. Companies must have a written code of ethics in order to conduct interstate commerce in the U.S.

The overall attitude and awareness of a firm's top management and board of directors concerning the importance of internal control is often reflected in its A. Computer-based controls. B. System of segregation of duties. C. Control environment. D. Safeguards over access to assets.

Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5 (AS 5) encourages auditors to start from the basic/bottom of financial records to identify the key controls.

All of the following are examples of internal control procedures except A. Using pre-numbered documents B. Reconciling the bank statement C. Customer satisfaction surveys D. Insistence that employees take vacations

Which of the following control activities should be taken to reduce the risk of incorrect processing in a newly installed computerized accounting system? A. Segregation of duties. B. Ensure proper authorization of transactions. C. Adequately safeguard assets. D. Independently verify the transactions.