Question 1

Each of the following types of controls is considered to be an entity-level control,except those:

Accepted Answer

A)  Relating to the control environment.
B)  Pertaining to the company's risk assessment process.
C)  Regarding the company's annual stockholder meeting.
D)  Addressing policies over significant risk management practices.E) None of the above
F) A) and B)

Question 2

Tracing shipping documents to pre-numbered sales invoices provides evidence that:

Accepted Answer

A)  No duplicate shipments or billings occurred.
B)  Shipments to customers were properly invoiced.
C)  All goods ordered by customers were shipped.
D)  All pre-numbered sales invoices were accounted for.E) All of the above
F) A) and D)

Question 3

Reconciliation of cash accounts may be referred to as what type of control?

Accepted Answer

A)  Detective.
B)  Preventive.
C)  Adjustive.
D)  Non-routine.E) B) and D)
F) A) and D)

Question 4

Given the requirement of the Sarbanes-Oxley Act of 2002 (SOX),the Public Company Accounting Oversight Board (PCAOB)established the Securities and Exchange Commission (SEC)to provide independent oversight of public accounting firms.

Accepted Answer

A) True 
 B)False

Question 5

Segregation of duties reduces the risk of errors and irregularities in accounting records.

Accepted Answer

A) True 
 B)False

Question 6

In a computerized environment,internal controls can be categorized into which of the following?

Accepted Answer

A)  General controls and application controls.
B)  Detective controls and protective controls.
C)  Network controls and transaction controls.
D)  Preventive controls and mandatory controls.E) B) and C)
F) A) and B)

Question 7

Which of the following is not one of the key COBIT 5 principles for governance and amangement of enterprise IT?

Accepted Answer

A)  Enabling a holistic approach.
B)  Meeting stakeholder needs.
C)  Separating management from shareholders.
D)  Applying an integrated framework.E) A) and D)
F) C) and D)

Question 8

All of the following are the primary functions of internal controls except:

Accepted Answer

A)  Prevention.
B)  Reflection.
C)  Detection.
D)  Correction.E) A) and C)
F) A) and B)

Question 9

Which of the following is an example of a validity check?

Accepted Answer

A)  The computer ensures that a numerical amount in a record does not exceed some predetermined amount.
B)  As the computer corrects errors and data are successfully resubmitted to the system,the causes of the errors are printed out.
C)  The computer flags any transmission for which the control field value did not match that of an existing file record.
D)  After data for a transaction are entered,the computer sends certain data back to the terminal for comparison with data originally sent.E) All of the above
F) A) and B)

Question 10

Sound internal control dictates that immediately upon receiving checks from customers by mail,a responsible employee should

Accepted Answer

A)  Add the checks to the daily cash summary.
B)  Verify that each check is supported by a pre-numbered sales invoice.
C)  Prepare a summary listing of checks received.
D)  Record the checks in the cash receipts journal.E) None of the above
F) C) and D) C

Question 11

In the event identification component of the COSO ERM framework,management must classify events into which of the following?

Accepted Answer

A)  Weaknesses and vulnerabilities.
B)  Risks and opportunities.
C)  Risks and rewards.
D)  Controls and vulnerabilities.E) None of the above
F) A) and B)

Question 12

Which of the following represents an application control for a customer sale?

Accepted Answer

A)  The customer name must be populated.
B)  Accounts are reconciled.
C)  A manager reviews all return transactions.
D)  Procedures are documented.E) B) and C)
F) A) and D)

Question 13

Which of the following is not a component of internal control as defined by COSO?

Accepted Answer

A)  Control environment.
B)  Control activities.
C)  Inherent risk.
D)  Monitoring.E) A) and D)
F) A) and C)

Question 14

Which of the following control activities should be taken to reduce the risk of incorrect processing in a newly installed computerized accounting system?

Accepted Answer

A)  Segregation of duties.
B)  Ensure proper authorization of transactions.
C)  Adequately safeguard assets.
D)  Independently verify the transactions.E) A) and D)
F) C) and D)

Question 15

Which of the following is the best way to compensate for the lack of adequate segregation of duties in a small organization?

Accepted Answer

A)  Disclosing lack of segregation of duties to external auditors during the annual review.
B)  Replacing personnel every three or four years.
C)  Requiring accountants to pass a yearly background check.
D)  Providing greater management oversight of incompatible activities.E) A) and D)
F) A) and C)

Question 16

If a Chief Technology Officer wanted to ensure a new system had appropriate processing controls which of the following would he/she require?

Accepted Answer

A)  Disposal of excess documents.
B)  URL Class diagram.
C)  A record count.
D)  Password management.E) A) and B)
F) B) and C) C

Question 17

Internal controls guarantee the accuracy and reliability of accounting records.

Accepted Answer

A) True 
 B)False

Question 18

The chief executive officer is ultimately responsible for enterprise risk management.

Accepted Answer

A) True 
 B)False  True

Question 19

Which of the following statement is correct regarding internal control?

Accepted Answer

A)  A well-designed internal control environment ensures the achievement of an entity's control objectives.
B)  An inherent limitation to internal control is the fact that controls can be circumvented by management override.
C)  A well-designed and operated internal control environment should detect collusion perpetrated by two people.
D)  Internal control in a necessary business function and should be designed and operated to detect errors and fraud.E) A) and C)
F) B) and C)

Question 20

Which of the following provides the advantage of incorporating other widely accepted standards and frameworks?

Accepted Answer

A)  ITIL.
B)  COBIT 2019.
C)  COSO 2013.
D)  ISO 27000.E) B) and D)
F) A) and B)

Exam 13: Accounting Information Systems and Internal Controls

Each of the following types of controls is considered to be an entity-level control,except those:

Correct AnswerverifiedShow Answer

Tracing shipping documents to pre-numbered sales invoices provides evidence that:

Correct AnswerverifiedShow Answer

Reconciliation of cash accounts may be referred to as what type of control?

Correct AnswerverifiedShow Answer

Given the requirement of the Sarbanes-Oxley Act of 2002 (SOX),the Public Company Accounting Oversight Board (PCAOB)established the Securities and Exchange Commission (SEC)to provide independent oversight of public accounting firms.

Correct AnswerverifiedShow Answer

Segregation of duties reduces the risk of errors and irregularities in accounting records.

Correct AnswerverifiedShow Answer

In a computerized environment,internal controls can be categorized into which of the following?

Correct AnswerverifiedShow Answer

Which of the following is not one of the key COBIT 5 principles for governance and amangement of enterprise IT?

Correct AnswerverifiedShow Answer

All of the following are the primary functions of internal controls except:

Correct AnswerverifiedShow Answer

Which of the following is an example of a validity check?

Correct AnswerverifiedShow Answer

Sound internal control dictates that immediately upon receiving checks from customers by mail,a responsible employee should

Correct AnswerverifiedC

In the event identification component of the COSO ERM framework,management must classify events into which of the following?

Correct AnswerverifiedShow Answer

Which of the following represents an application control for a customer sale?

Correct AnswerverifiedShow Answer

Which of the following is not a component of internal control as defined by COSO?

Correct AnswerverifiedShow Answer

Which of the following control activities should be taken to reduce the risk of incorrect processing in a newly installed computerized accounting system?

Correct AnswerverifiedShow Answer

Which of the following is the best way to compensate for the lack of adequate segregation of duties in a small organization?

Correct AnswerverifiedShow Answer

If a Chief Technology Officer wanted to ensure a new system had appropriate processing controls which of the following would he/she require?

Correct AnswerverifiedC

Internal controls guarantee the accuracy and reliability of accounting records.

Correct AnswerverifiedShow Answer

The chief executive officer is ultimately responsible for enterprise risk management.

Correct AnswerverifiedTrue

Which of the following statement is correct regarding internal control?

Correct AnswerverifiedShow Answer

Which of the following provides the advantage of incorporating other widely accepted standards and frameworks?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified