Materiality of the assets
Question 1
All the following are factors in the fraud triangle except
Ethical behavior of an individual (rationalization)
Pressure exerted on an individual at home and job related
Materiality of the assets
Opportunity to gain access to assets
Question 2
0 out of 0 points
Which of the following best describes lapping?
applying cash receipts to a different customer’s account in an attempt to conceal previous thefts of funds
inflating bank balances by transferring money among different bank accounts
expensing an asset that has been stolen
creating a false transaction
Question 3
Skimming involves
Stealing cash from an organization before it is recorded
Stealing cash from an organization after it has been recorded
A clerk pays a vendor twice for the same products and cashes the reimbursement check issued by the vendor.
Manufacturing false purchase orders, receiving reports, and invoices
Question 4
Who is responsible for establishing and maintaining the internal control system?
internal auditor
accountant
management
external auditor
Question 5
Which of the following is not a limitation of the internal control system?
errors are made due to faulty judgement
fraud occurs because of collusion between two employees
the industry is inherently risky
management override when management instructs the bookkeeper to make fraudulent journal entries
Question 6
Cash larceny involves
Stealing cash from an organization before it is recorded
stealing cash from an organization after it has been recorded
manufacturing false purchase orders, receiving reports, and invoices
A clerk pays a vendor twice for the same products and cashes the reimbursement check issued by the vendor.
Question 7
What are the five internal control components described in SAS78/COSO?
Control environment
Risk assessment
Information and communication
Monitoring such as an effective internal audit function
Control activities which include separation of duties and a well designed accounting system
Question 8
A key modifying assumption in internal control is that the internal control system is the responsibility of management.
True
False
Question 9
The Sarbanes-Oxley Act requires the audit committee to hire and oversee the external auditors.
True
False
Question 10
Managers that perpetrate fraud often do so by overriding the internal control system.
True
False
Question 11
The control environment is the foundation for an organization’s internal control.
True
