NEW
Font size
Worksheets4.1.1/4.1.2 Internal & Cash Controls
Total questions: 10
Worksheet time: 5mins
The Sarbanes-Oxley Act of 2002 was intended to meet which major objective?
limit ownership of a corporation to U.S. citizens
prevent corporate officers from investing in their own businesses
prevent owners of an organization from committing stock fraud
protect the assets of an organization for business use
An employee who fails to comply with the processes and procedures describing how to complete a task is violating _____.
monitoring
control activities
information and communication
Why is rotating employees into different positions a good internal control procedure?
because it saves money in training costs and in employee salaries
because the organization can fill open positions more quickly
because it allows people to spot instances of internal control noncompliance
because the longer employees stay in one position, the less likely they are to comply with company policy
The idea that a person who has custody of money or products should never be the person keeping records accounting for them is called _____.
risk assessment
assignment of responsibilities
dual control
separation of duties and approvals
Which of the following is an indication of a possible breach of asset security?
One employee approves and makes payments.
Check documents have been pre-numbered.
Customers receive very few cash refunds.
Payments to creditors are made quickly.
The separation of duties and approvals can be violated by resorting to _____.
dual control
collusion
assignment of responsibilities
control activities
Which characteristic of cash makes it especially susceptible to theft and fraud?
its popularity
its portability
its liquidity
its accountability
The person who collects cash and writes a receipt should not be the person who _____.
supervises other cashiers
makes the bank deposit
writes the cash receipt
enters cash receipts into the ledger
The most effective means of internal cash controls is _____.
paying by electronic funds transfer
writing checks in numerical sequence
having two managers of accounts payable
sending checks for verification
Why is doing timely reconciliations a key part of internal control activities?
It is part of Sarbanes-Oxley legislation.
It is much easier to correct mistakes if they are caught early.
Checks usually expire after two weeks.
It ensures that accounts filed with the government are accurate.
