ACC 344 Study Guide - Quiz Guide: Sarbanes–Oxley Act, Enterprise Risk Management, Internal Control
H. Effective internal control in a small company that has an insufficient number of employees to permit
proper separation of responsibilities can be improved by:
(1)Employment of temporary personnel to aid in the separation of duties.
(2) Direct participation by the owner in key record keeping and control activities of the business.
(3) Engaging a CPA to perform monthly write-up work.
(4) Delegation of full, clear-cut responsibility for a separate major transaction cycle to each employee.
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I. Which of the following is not an advantage of establishing an enterprise risk management system
within an organization?
(1) Reduces operational surprises.
(2) Provides integrated responses to multiple risks.
(3) Eliminates all risks.
(4) Identifies opportunities.
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J. Which of the following is not ordinarily a procedure for documenting an auditor's understanding of
internal control for planning purposes?
(1) Checklist.
(2) Confirmation.
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(3) Flowchart.
(4) Questionnaire.
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K. To have an adequate basis to issue a management report on internal control under Section 404(a) of
the Sarbanes-Oxley Act, management must do all of the following, except:
(1) Establish internal control with no material weakness.
(2) Accept responsibility for the effectiveness of internal control.
(3) Evaluate the effectiveness of internal control using suitable control criteria.
(4) Support the evaluation with sufficient evidence.
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L. When the auditors are performing a first-time internal control audit in accordance with the Sarbanes-
Oxley Act and PCAOB standards, they should:
(1) Modify their report for any significant deficiencies identified.
(2) Use a "bottom-up" approach to identify controls to test.
(3) Test controls for all significant accounts.
(4) Perform a separate assessment of controls over operations.
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36.
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a. You are performing an audit of Systex Corporation and evaluating various controls. Classify the
following controls as being primarily preventive (P), detective (D), or corrective (C). Explain your
answers.
Annual Physical Inventory.
Detective
b. You are performing an audit of Systex Corporation and evaluating various controls. Classify the
following controls as being primarily preventive (P), detective (D), or corrective (C). Explain your
answers.
Monthly reconciliation of bank accounts.
Detective
c. You are performing an audit of Systex Corporation and evaluating various controls. Classify the
following controls as being primarily preventive (P), detective (D), or corrective (C). Explain your
answers.
Segregation of duties over purchasing.
Preventive
d. You are performing an audit of Systex Corporation and evaluating various controls. Classify the
following controls as being primarily preventive (P), detective (D), or corrective (C). Explain your
answers.
Supervisory approval of time cards.
Preventive
e. You are performing an audit of Systex Corporation and evaluating various controls. Classify the
following controls as being primarily preventive (P), detective (D), or corrective (C). Explain your
answers.
Dual signatures for checks.
Preventive
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Document Summary
2: which of the following is not an advantage of establishing an enterprise risk management system within an organization? (1) reduces operational surprises. (2) provides integrated responses to multiple risks. (3) eliminates all risks. (4) identifies opportunities. 3: which of the following is not ordinarily a procedure for documenting an auditor"s understanding of internal control for planning purposes? (1) checklist. (2) confirmation. (3) flowchart. (4) questionnaire. 1: when the auditors are performing a first-time internal control audit in accordance with the sarbanes- 3: you are performing an audit of systex corporation and evaluating various controls. Preventive: you are performing an audit of systex corporation and evaluating various controls. Adjustment of perpetual inventory records to physical counts. Corrective: you are performing an audit of systex corporation and evaluating various controls. Detective: you are performing an audit of systex corporation and evaluating various controls. Classify the following controls as being primarily preventive (p), detective (d), or corrective (c).
