Financial Accounting CH5 review Verified Exam Questions and
Answers Latest update 2026/2027
Question:
Purpose of Sarbanes-Oxley Act is
a. to restore public confidence..
b. to require all comp...
c. to protect comp. from demands
d. all of these choices
Answer:
a. to restore public confidence and trust in the financial statements of publicly held
companies
Question:
The Sarbanes Oxley act requires a company and its independence accountants to report on
a. the effectiveness of the company's
internal controls
b. any fraud and theft detected in the
company
c. the state of the economy and likelihood
of fraud
Answer:
a. the effectiveness of the company's internal controls
Question:
the framework that has become widely accepted as the standard by which companies design, analyze,
and evaluate internal controls is the
a. internal control integrated framework by
the committee of sponsoring organizations
b. internal control localized structure by
the committee of sponsoring organizations
Answer:
a. internal control integrated framework by the committee of sponsoring
organizations
, Question:
internal controls are important because they
a. deter fraud and prevent misleading
financial statements
b. eliminate frauds
c. ensure that the company maintains a
compensating balance
Answer:
a. deter fraud and prevent misleading financial statements
Question:
which of the following warning signs could mean receipts are being pocketed before being deposited?
a. missing documents or gaps in transaction
numbers
b. an unusual increase in customer refunds
c. a sudden increase in cash payments
d. a difference between daily cash receipts
and bank deposits
Answer:
a. a difference between daily cash receipts and bank deposits
Question:
internal control consists of policies and procedures that
a. involve cost-benefit considerations
b. deal with the human element of controls
such as fatigue, carelessness
c. ensure public relations
d. ensure the accuracy of business
information
Answer:
d. ensure the accuracy of business information
Question:
which of the following scenarios reduces the risk of an employee fraud?
a. an accountant being responsible for
approving payments to a vendor
b. the bank reconciliation being prepared
by an accountant
c. a sales clerk having access to the cash
register
Answer:
a. an accountant being responsible for approving payments to a vendor
Answers Latest update 2026/2027
Question:
Purpose of Sarbanes-Oxley Act is
a. to restore public confidence..
b. to require all comp...
c. to protect comp. from demands
d. all of these choices
Answer:
a. to restore public confidence and trust in the financial statements of publicly held
companies
Question:
The Sarbanes Oxley act requires a company and its independence accountants to report on
a. the effectiveness of the company's
internal controls
b. any fraud and theft detected in the
company
c. the state of the economy and likelihood
of fraud
Answer:
a. the effectiveness of the company's internal controls
Question:
the framework that has become widely accepted as the standard by which companies design, analyze,
and evaluate internal controls is the
a. internal control integrated framework by
the committee of sponsoring organizations
b. internal control localized structure by
the committee of sponsoring organizations
Answer:
a. internal control integrated framework by the committee of sponsoring
organizations
, Question:
internal controls are important because they
a. deter fraud and prevent misleading
financial statements
b. eliminate frauds
c. ensure that the company maintains a
compensating balance
Answer:
a. deter fraud and prevent misleading financial statements
Question:
which of the following warning signs could mean receipts are being pocketed before being deposited?
a. missing documents or gaps in transaction
numbers
b. an unusual increase in customer refunds
c. a sudden increase in cash payments
d. a difference between daily cash receipts
and bank deposits
Answer:
a. a difference between daily cash receipts and bank deposits
Question:
internal control consists of policies and procedures that
a. involve cost-benefit considerations
b. deal with the human element of controls
such as fatigue, carelessness
c. ensure public relations
d. ensure the accuracy of business
information
Answer:
d. ensure the accuracy of business information
Question:
which of the following scenarios reduces the risk of an employee fraud?
a. an accountant being responsible for
approving payments to a vendor
b. the bank reconciliation being prepared
by an accountant
c. a sales clerk having access to the cash
register
Answer:
a. an accountant being responsible for approving payments to a vendor
