©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
ACTG 474 Exam 1 Questions With Correct
Answers 100% Verified.
How is a flowchart different from a DFD? (data flow diagram) - Answer✔a flowchart has more
procedures
whereas a DFD is more abstract and more process
a dashed line between two elements in a flowchart represent what? - Answer✔a flow of
data/information
a physical flow of documentation - Answer✔→
a branch in a decision - Answer✔
a transmission of data via a communication line - Answer✔↯
in a DFD diagram, when two elements share an arrow between a source and a process this
suggests what? - Answer✔the two data elements flow together
what is an internal control? - Answer✔a process that gives reasonable assurance that the firms
objectives are achieved
type of internal controls - Answer✔corrective- identify and correct problems as well as correct
and recover from the resulting errors
detective- discover problems that were not preventive
preventative- deter problems before they arise
examples of the types of internal controls - Answer✔corrective- maintain backups, correcting
data entry errors
detective- bank reconciliation
preventative- segregating duties, access controls
threats to objectives - Answer✔hardware malfunctions, loss of personnel, natural disasters,
intentional acts
1|Page
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
sarbanes- oxley (SOX) 2002 - Answer✔what does SOX do?
it changes the law governing auditing and corporate responsibility
who does SOX affect? - Answer✔-board of directors
-"C"- level executives (CEO, CFO, etc.)
-auditors
who benefits from SOX? - Answer✔-investors
-accountants
SOX highlights - Answer✔-regulates auditors more closely
-created the Public Company Accounting Oversight Board (PCAOB)
-regulates board of directors more closely
-regulates management more closely
COSO - Answer✔committee of sponsoring organizations:
is a joint initiative that aims to provide a framework for organizations to improve their
governance, risk management, and internal controls. Established in the late 1980s, COSO is
well-known for its Internal Control—Integrated Framework and Enterprise Risk Management—
Integrated Framework.
Enterprise Risk Management (ERM) - Answer✔was an attempt to develop a standardized
comprehensive framework for internal controls
ERM- Internal environment - Answer✔-the people side of things
-reflects an entity's enterprise risk management philosophy, risk appetite, board oversight,
commitment to ethical values, competence and development of people, and assignment of
authority and responsibility.
It encompasses the "tone at the top" of the enterprise and influences the organization's
governance process and the risk and control consciousness of its people.
Board of directors - rubber stamped boards (yes men)
What happens when someone violates its standards
ERM- objective setting - Answer✔management sets strategic objectives, which provide a
context for operational, reporting and compliance objectives. objectives are aligned with the
entity's risk appetite, which drives risk tolerance levels for the entity, and are a precondition to
even identification, risk assessment and risk response
2|Page
ACTG 474 Exam 1 Questions With Correct
Answers 100% Verified.
How is a flowchart different from a DFD? (data flow diagram) - Answer✔a flowchart has more
procedures
whereas a DFD is more abstract and more process
a dashed line between two elements in a flowchart represent what? - Answer✔a flow of
data/information
a physical flow of documentation - Answer✔→
a branch in a decision - Answer✔
a transmission of data via a communication line - Answer✔↯
in a DFD diagram, when two elements share an arrow between a source and a process this
suggests what? - Answer✔the two data elements flow together
what is an internal control? - Answer✔a process that gives reasonable assurance that the firms
objectives are achieved
type of internal controls - Answer✔corrective- identify and correct problems as well as correct
and recover from the resulting errors
detective- discover problems that were not preventive
preventative- deter problems before they arise
examples of the types of internal controls - Answer✔corrective- maintain backups, correcting
data entry errors
detective- bank reconciliation
preventative- segregating duties, access controls
threats to objectives - Answer✔hardware malfunctions, loss of personnel, natural disasters,
intentional acts
1|Page
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
sarbanes- oxley (SOX) 2002 - Answer✔what does SOX do?
it changes the law governing auditing and corporate responsibility
who does SOX affect? - Answer✔-board of directors
-"C"- level executives (CEO, CFO, etc.)
-auditors
who benefits from SOX? - Answer✔-investors
-accountants
SOX highlights - Answer✔-regulates auditors more closely
-created the Public Company Accounting Oversight Board (PCAOB)
-regulates board of directors more closely
-regulates management more closely
COSO - Answer✔committee of sponsoring organizations:
is a joint initiative that aims to provide a framework for organizations to improve their
governance, risk management, and internal controls. Established in the late 1980s, COSO is
well-known for its Internal Control—Integrated Framework and Enterprise Risk Management—
Integrated Framework.
Enterprise Risk Management (ERM) - Answer✔was an attempt to develop a standardized
comprehensive framework for internal controls
ERM- Internal environment - Answer✔-the people side of things
-reflects an entity's enterprise risk management philosophy, risk appetite, board oversight,
commitment to ethical values, competence and development of people, and assignment of
authority and responsibility.
It encompasses the "tone at the top" of the enterprise and influences the organization's
governance process and the risk and control consciousness of its people.
Board of directors - rubber stamped boards (yes men)
What happens when someone violates its standards
ERM- objective setting - Answer✔management sets strategic objectives, which provide a
context for operational, reporting and compliance objectives. objectives are aligned with the
entity's risk appetite, which drives risk tolerance levels for the entity, and are a precondition to
even identification, risk assessment and risk response
2|Page
