Accounting 131 Exam 2 Questions and Answers Already Passed Latest Update

Accounting 131 Exam 2 Questions and Answers Already Passed Latest Update internal control systems - Answers All policies and procedures established by top management and the BOD to provide reasonable assurance that the company's objectives are being met operations objectives - Answers Effectiveness and efficiency of the entity's operations, including financial performance goals and safeguarding assets against loss reporting objectives - Answers Reliability of reporting; including internal and external financial and non-financial reporting. compliance objectives - Answers Compliance with applicable laws and regulations components of internal control - Answers control environment and ethical behavior, risk assessment, control activities, information and communication, monitoring control environment and ethical behavior - Answers philosophy and operating style of management, personnel policies and practices of the businesses, overall integrity, attitude, awareness, and actions of everyone in the business philosophy and operating style of management - Answers ethical culture starts at the top personnel policies and practices of the businesses - Answers policies and practices should assist employees in making the right decision overall integrity, attitude, awareness, and actions of everyone in the business - Answers tone at the top, how ethical dilemmas are resolved risk assessment - Answers strategic risks, business process risks strategic risks - Answers external risks to the organization business process risks - Answers threats to the internal processes of a company control activities - Answers clearly defined authority and responsibility, segregation of duties, adequate documents and records, safeguards over assets and records, checks on recorded amounts clearly defined authority and responsibility - Answers authority must be given to all responsible individuals segregation of duties - Answers separation of duties to help prevent collusion and double-check for errors adequate documents and records - Answers underlying documents that support the summary reports. allowing better double-checking. vouchers, receiving reports safeguards over assets and records - Answers physical protection such as locks, vaults, keycard access, and cyber protection such as anti-virus, backups, and password policies checks on recorded amounts - Answers clerical checks, reconciliations, spot checks, computer controls, management reviews, prevent and detect fraud and theft information and communication - Answers gathering the proper information and communicating to proper external and internal users (avoid garbage in garbage out) monitoring - Answers internal auditing fraud triangle - Answers a framework for spotting high-risk fraud situations, components: opportunity, pressure, rationalization opportunity - Answers ability to execute plan without being caught , companies must have good internal controls to remove the ability to execute a plane of fraud without being caught pressure - Answers financial or emotional force pushing towards fraud, employers must understand and assist with employees' needs or at least be aware of any needs that are excessive rationalization - Answers personal justification of dishonest actions, employers should be aware of employee feelings which are distorted to the point of justifying wrong cash controls - Answers Internal controls are designed to protect all assets. But since cash is the most liquid asset (easily converted to cash), it has the most potential for loss. step 1 of a bank reconciliation - Answers compare the deposits on the bank statement to the deposits debited to the cash account step 2 of a bank reconciliation - Answers compare the paid (cancelled) checks that are electronically returned with the bank statement to amounts credited to the cash account and the list of outstanding checks from the prior months step 3 of a bank reconciliation - Answers look for items on the bank statement that have not been debited or credited to the cash account