ACTG 313 Practice Question
With Correct Answers
A management information system - ANSWER supports the operations,
management, and decision-making functions in an organization
What s false about AIS? - ANSWER An AIS is best suited to solve problems
where there is great uncertainty and ill-defined reporting requirements
Your firm has recently converted its purchasing cycle from a manual process
to an online computer system. What is a probable result of the conversion? -
ANSWER traditional duties are less separated
in the organization of the information systems function, the most important
segregation of duties is: - ANSWER assuming that those responsible for
programming the system do. not have access to data processing operations
what risks are greater in computerized systems than in manual systems? -
ANSWER 1. Erroneous data conversion
2. repetition of errors
3. concentration of data
a file containing relatively permanent information used as a source of
reference and periodically updates with detail is termed a: - ANSWER master
file
what feature is LEAST likely to be found in a real-time application? - ANSWER
turnaround documents
,Objectivity in the AICPA code of conduct refers to a CPA's ability to: -
ANSWER maintain an impartial attitude on all matters that come under the
CPA's review
audit risk at the assertion level consist of inherent risk, control risk, and
detection risk, what is true regarding this? - ANSWER cash is more
susceptible to theft than an inventory of coal because it has greater inherent
risk
the components of internal control include: - ANSWER a process of
managing risks relevant to preparing financial statements
in an audit of financial statements, an auditor's primary consideration
regarding an internal control is whether the control: - ANSWER affects
management's financial statement assertions
the primary reason to establish internal controls is to - ANSWER provide
reasonable assurance that the objectives of the organization are achieved
internal control can provide only reasonable assurance of achieving an
entity's control objectives. The likelihood of achieving those objectives is
affected by which limitation inherent to internal control? - ANSWER the cost
of internal control should not exceed its benefits
The risk of material misstatements (RNMs) should be assessed in terms of -
ANSWER financial statement assertions
what best describes managements requirements for strategic planning? -
ANSWER wide scope
aggregate
future-oriented info
, if internal controls is properly designed, the same employee may be
permitted to - ANSWER sign checks and also cancel supporting documents
The. internal control objectives of the revenue cycle include: - ANSWER 1.
Revenue cycle transactions are properly executed
2. Transactions relating to revenue are properly recorded
3. Custody over assets resulting from the revenue cycle is properly
maintained
an auditors test an entity's policy of obtaining credit approval before
shipping goods to customers in support of management's financial
statement assertion of: - ANSWER Valuation
what control would most likely help ensure that all credit sales transaction of
an entity are recorded? - ANSWER the billing department supervisor matches
prenumbered shipping documents with entries in the sales journal
cash receipts from sales on account have been misappropriated what act
would conceal this defalcation and be least likely to be detected - ANSWER
understating the sales journal entry
In retail cash sales environment, what control is often missing - ANSWER
separation of duties
proper authorization of write-offs of uncollectible accounts should be
approved in which department? - ANSWER CFO
sound internal control activities dictate that defective merchandise returned
by customers be presented initially to the - ANSWER Receiving clerk
if the objective of an auditor's test of details is to detect a possible
With Correct Answers
A management information system - ANSWER supports the operations,
management, and decision-making functions in an organization
What s false about AIS? - ANSWER An AIS is best suited to solve problems
where there is great uncertainty and ill-defined reporting requirements
Your firm has recently converted its purchasing cycle from a manual process
to an online computer system. What is a probable result of the conversion? -
ANSWER traditional duties are less separated
in the organization of the information systems function, the most important
segregation of duties is: - ANSWER assuming that those responsible for
programming the system do. not have access to data processing operations
what risks are greater in computerized systems than in manual systems? -
ANSWER 1. Erroneous data conversion
2. repetition of errors
3. concentration of data
a file containing relatively permanent information used as a source of
reference and periodically updates with detail is termed a: - ANSWER master
file
what feature is LEAST likely to be found in a real-time application? - ANSWER
turnaround documents
,Objectivity in the AICPA code of conduct refers to a CPA's ability to: -
ANSWER maintain an impartial attitude on all matters that come under the
CPA's review
audit risk at the assertion level consist of inherent risk, control risk, and
detection risk, what is true regarding this? - ANSWER cash is more
susceptible to theft than an inventory of coal because it has greater inherent
risk
the components of internal control include: - ANSWER a process of
managing risks relevant to preparing financial statements
in an audit of financial statements, an auditor's primary consideration
regarding an internal control is whether the control: - ANSWER affects
management's financial statement assertions
the primary reason to establish internal controls is to - ANSWER provide
reasonable assurance that the objectives of the organization are achieved
internal control can provide only reasonable assurance of achieving an
entity's control objectives. The likelihood of achieving those objectives is
affected by which limitation inherent to internal control? - ANSWER the cost
of internal control should not exceed its benefits
The risk of material misstatements (RNMs) should be assessed in terms of -
ANSWER financial statement assertions
what best describes managements requirements for strategic planning? -
ANSWER wide scope
aggregate
future-oriented info
, if internal controls is properly designed, the same employee may be
permitted to - ANSWER sign checks and also cancel supporting documents
The. internal control objectives of the revenue cycle include: - ANSWER 1.
Revenue cycle transactions are properly executed
2. Transactions relating to revenue are properly recorded
3. Custody over assets resulting from the revenue cycle is properly
maintained
an auditors test an entity's policy of obtaining credit approval before
shipping goods to customers in support of management's financial
statement assertion of: - ANSWER Valuation
what control would most likely help ensure that all credit sales transaction of
an entity are recorded? - ANSWER the billing department supervisor matches
prenumbered shipping documents with entries in the sales journal
cash receipts from sales on account have been misappropriated what act
would conceal this defalcation and be least likely to be detected - ANSWER
understating the sales journal entry
In retail cash sales environment, what control is often missing - ANSWER
separation of duties
proper authorization of write-offs of uncollectible accounts should be
approved in which department? - ANSWER CFO
sound internal control activities dictate that defective merchandise returned
by customers be presented initially to the - ANSWER Receiving clerk
if the objective of an auditor's test of details is to detect a possible
