IA Quiz

If the company does not compare forecast vs. actual cash flow, what is the main risk?
A. Unnecessary bank reconciliations

• Unnecessary bank reconciliations

• Failure to identify liquidity shortfalls early

• Excessive accounting documentation

• Overpayment of taxes

The Finance Manager prepares the cash flow forecast, which is verbally approved by the CFO and CEO during a management meeting. However, no meeting minutes or documentation is retained. Which statement is most accurate?

• Documentation is not necessary since approval was already given verbally in the meeting.

• Cash flow forecasts do not require approval as long as actual cash flows are monitored.

• Approval should be supported by meeting minutes or other formal records to provide audit evidence.

• Approval is only required for financial statements, not for forecasts.

Company seals and e-banking tokens are stored in the finance office cabinet, accessible to all staff. Which is the most appropriate control?

• This is acceptable as long as CCTV is installed.

• They should be kept in a secured location with access restricted to authorised personnel.

• Access can be open to all finance staff to avoid bottlenecks.

• Storing them with petty cash is sufficient for convenience.

In a Chinese company, which combination of seals should not be held by the same person due to high risk of misuse?

• Company Seal (公章) + Legal Representative’s Seal (法人章)

• Finance Seal (财务章) + Invoice Seal (发票章)

• Contract Seal (合同章) + Invoice Seal (发票章)

HR posts a job and the manager verbally approves the candidate, but no email or written approval is retained. Which statement is most accurate?

• Recruitment is valid as long as the employee starts working.

• Verbal approval is sufficient for compliance.

• Payroll processing can substitute for recruitment approval.

• Written documentation is required to provide audit evidence and avoid disputes.

Attendance sheets are submitted monthly but managers do not approve them, assuming HR review is sufficient. What is the main risk?

• Payroll errors and potential overpayment.

• Employees will be unable to submit leave requests.

• Performance appraisals will be invalid.

An HR staff member can create new employee records but cannot edit salary or bank details, and all edits require manager approval.

• No risk

• It is a risk

An HR staff member creates new employee records and can edit salary and bank details, but all payroll runs are reviewed by manager.

• No risk

• Risk