31 which of the following statements about internal control is not true a internal c 4352148

31.Which of the following statements about internal control is NOT true?

a.internal control consists of procedures designed to protect an organization's assets

b.internal control ensures the reliability of an organization's accounting records

c.internal controls reduce the likelihood of error, omission or misstatement

d.internal control applies only to companies that use computerized accounting systems

32.Examples of internal control procedures include all of the following EXCEPT

a.accounting records should be verified independently

b.record-keeping responsibilities should be separated from physical control over resources

c.limit access to accounting records to top management

d.use of pre-numbered documents and forms

33.The procedures designed to protect assets and ensure the accuracy of accounting records are known as

a.internal controls

b.closing the books

c.auditing standards

d.accounting principles

34.Good internal controls might help to prevent which of the following events?

a.incorrectly recording a $10,480 purchase at $14,080

b.losing $20,000 of merchandise to theft

c.entering both sides of a transaction as debits

d.all the above might be prevented by proper internal controls

35.The purpose of internal controls is to

a.ensure that production of goods and services will meet market demand

b.protect assets and ensure the accuracy of accounting information

c.ensure that tax returns will be filed in a timely manner

d.ensure that there will be no fraud or errors in the accounting system

36.Electronic tagging of merchandise inventory, use of surveillance equipment, and cash registers are all examples of

a.computer system controls

b.human resources controls

c.internal controls

d.external controls

37.The establishment of an environment of ethical conduct within a business can accomplished by:

a.managers setting the tone by acting with integrity

b.establishing an audit committee

c.periodic performance reviews of all employees

d.all of the above answers are correct

38.A code of ethics:

a.ensures acting above the law

b.is an abatement of moral hazards

c.is not needed if a company has an annual audit

d.spells out acceptable and expected behavior

39.Securing of merchandise in warehouses or locked cases is an example of:

a.computer system control

b.human resources control

c.physical control

d.insecurity issues

 

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