MAC 2601 EXAM QUESTIONS WITH VERIFIED
AND DETAILED SOLUTIONS 2025-2026
\GRADED A+
2 principles of Monitoring - ANSWERS1. selects, develops
and performs ongoing and separate evaluations of the
controls
2. communicates deficiencies in a timely manner
control activities - ANSWERSresponds to a specific risk,
whereas a monitoring activity assesses whether controls
within each of the five components of internal control
are operating as intended
monitoring activities - ANSWERSongoing evaluations
built into business processes at different levels of entity
that provide timely information. they vary in scope and
frequency
1
,common control activities present in well designed
system of controls - ANSWERSsegregation of
incompatible function, performance review, IT access
control activities, documentation, physical access control
activities, IT application, physical access control activities
3 layers of monitoring activities - ANSWERS1. everyday
activities performed by mgmt of a given area
2. non independent evaluation of internal controls
performed by mgmt on a regular basis to identify and
resolve any deficiency
3. independent assessment by an outside area or
function
limitations of internal control - ANSWERSno system of
internal controls can provide absolute assurance that
organization's objectives have been met
reasons for limitations of internal control -
ANSWERSerror in human judgment in decision making or
bias, simple error in processing due to human failure,
2
, mgmt override, collusion, external event beyond the
organization's control
consequences of accepting excessive risk -
ANSWERSpotential loss of assets, poor or ineffective
business decision making, potential non compliance with
laws and regs, potential for fraud to occur
consequences of implementing excessive internal control
- ANSWERSincreased bureaucracy, excess cost,
unnecessary complexity of controls, increased cycle time,
non value added activities
types of internal controls - ANSWERSentity level, process
level, transaction level
entity level control - ANSWERSA control that operates
across an entire entity and, as such, is not bound by, or
associated with, individual processes.
3
AND DETAILED SOLUTIONS 2025-2026
\GRADED A+
2 principles of Monitoring - ANSWERS1. selects, develops
and performs ongoing and separate evaluations of the
controls
2. communicates deficiencies in a timely manner
control activities - ANSWERSresponds to a specific risk,
whereas a monitoring activity assesses whether controls
within each of the five components of internal control
are operating as intended
monitoring activities - ANSWERSongoing evaluations
built into business processes at different levels of entity
that provide timely information. they vary in scope and
frequency
1
,common control activities present in well designed
system of controls - ANSWERSsegregation of
incompatible function, performance review, IT access
control activities, documentation, physical access control
activities, IT application, physical access control activities
3 layers of monitoring activities - ANSWERS1. everyday
activities performed by mgmt of a given area
2. non independent evaluation of internal controls
performed by mgmt on a regular basis to identify and
resolve any deficiency
3. independent assessment by an outside area or
function
limitations of internal control - ANSWERSno system of
internal controls can provide absolute assurance that
organization's objectives have been met
reasons for limitations of internal control -
ANSWERSerror in human judgment in decision making or
bias, simple error in processing due to human failure,
2
, mgmt override, collusion, external event beyond the
organization's control
consequences of accepting excessive risk -
ANSWERSpotential loss of assets, poor or ineffective
business decision making, potential non compliance with
laws and regs, potential for fraud to occur
consequences of implementing excessive internal control
- ANSWERSincreased bureaucracy, excess cost,
unnecessary complexity of controls, increased cycle time,
non value added activities
types of internal controls - ANSWERSentity level, process
level, transaction level
entity level control - ANSWERSA control that operates
across an entire entity and, as such, is not bound by, or
associated with, individual processes.
3
