Question 1

The authority to grant credit for returns and allowances should be independent of which function?

Accepted Answer

A)   Shipping
B)   Sales order processing
C)   Billing (sometimes called customer invoicing) 
D)   Cash receipts

Question 2

While entering data into a cash receipts transaction file, an employee transposed two numbers in a numeric code. Which of the following controls would have prevented this type of error?

Accepted Answer

A)   Sequence check
B)   Record check
C)   Self-checking digit
D)   Field-length check

Question 3

Hiring trustworthy employees is the best way to minimize the opportunity for fraudulent activity,

Accepted Answer

A) True 
 B)False

Question 4

Describe the process of cryptography using private and public keys.

Accepted Answer

If a business requests sensitive data fr...

Question 5

Duties that should be segregated are authorization of transaction and other events, custody of assets, and modification or creation of related data and program files.

Accepted Answer

A) True 
 B)False

Question 6

General controls apply to the reliability and consistency of the overall information processing environment. To what do application controls apply?

Accepted Answer

A)   All information processing activities
B)   The flow of data in and among individual applications
C)   The assignment and supervision of personnel
D)   Accounting systems that use databases

Question 7

What should be the role of an information services steering committee?

Accepted Answer

A)   Initiate all applications development; set priorities for implementing, applications; develop system security.
B)   Assign duties to systems personnel; prepare and monitor application implementation plans; prepare system flowcharts.
C)   Establish/approve information processing policies, system projects, and priorities for implementing systems; evaluate effectiveness of processing operations; monitor processing activities.
D)   Decide on specific information needs; prepare detailed plans for system evaluations; set priorities for developing applications; decide what computer hardware will be purchased.

Question 8

A current trend with respect to the placement of controls is a movement away from controls programmed into computer software toward controls in human operating procedures.

Accepted Answer

A) True 
 B)False

Question 9

What kind of input control is involved when a self-checking digit is appended to a customer account number?

Accepted Answer

A)   Data verification control
B)   Data capture control
C)   Classification and identification control
D)   Hash control

Question 10

Which of the following control activities would most likely influence the behavior of managers?

Accepted Answer

A)   Monitoring compliance with internal controls
B)   Limiting direct access to assets by physical isolation and security devices
C)   Establishing budgets or standards and identifying variances from these budgets or standards
D)   Supporting employees with the resources necessary to discharge their responsibilities

Question 11

Performance measures should be quantitative as opposed to qualitative.

Accepted Answer

A) True 
 B)False

Question 12

Physical controls protect assets from theft and destruction.

Accepted Answer

A) True 
 B)False

Question 13

What is automatic rollback?

Accepted Answer

A)   An in-house backup that is completed through the Internet.
B)   A pricing method used by retailers.
C)   feature that backs out incomplete transactions.
D)   A feature that aids in the recovery of data.

Question 14

A trend is a movement away from programming controls into computer software and toward placing controls in human operating procedures.

Accepted Answer

A) True 
 B)False

Question 15

The authority for establishing selling prices normally resides with which of the following?

Accepted Answer

A)   Treasurer and upper management
B)   Controller and upper management
C)   Sales department and upper management
D)   Credit department and upper management

Question 16

In the process of identifying control activities, you must first identify risks.

Accepted Answer

A) True 
 B)False

Question 17

The need for prenumbered documents best relates to which of the following?

Accepted Answer

A)   Validation of transactions
B)   Segregation of duties
C)   Authorization of transactions
D)   Processing of all transactions

Question 18

What is the most likely source of errors in a computerized accounting system?

Accepted Answer

A)   Operator action
B)   Output
C)   Processing
D)   Input

Question 19

What are general computer controls?

Accepted Answer

A)   Controls related to the flow of data in and among support applications.
B)   Controls related to the reliability and consistency of the processing environment.
C)   Controls that separate functions that are not compatible.
D)   Controls to authorize staff to use specific programs.

Question 20

Monitoring control activities to determine if they are adequate and effective can be done on an ongoing basis, as a separate project, or as a combination of both. Briefly compare monitoring on an ongoing basis versus monitoring as a separate project.

Accepted Answer

Ongoing monitoring includes various comp...

Exam 7: Control Activities

The authority for establishing selling prices normally resides with which of the following?

Correct AnswerverifiedShow Answer

The need for prenumbered documents best relates to which of the following?

Correct AnswerverifiedShow Answer

Hiring trustworthy employees is the best way to minimize the opportunity for fraudulent activity,

Correct AnswerverifiedShow Answer

The authority to grant credit for returns and allowances should be independent of which function?

Correct AnswerverifiedShow Answer

Monitoring control activities to determine if they are adequate and effective can be done on an ongoing basis, as a separate project, or as a combination of both. Briefly compare monitoring on an ongoing basis versus monitoring as a separate project.

Correct AnswerverifiedOngoing monitoring includes various comp...View AnswerShow Answer

A current trend with respect to the placement of controls is a movement away from controls programmed into computer software toward controls in human operating procedures.

Correct AnswerverifiedShow Answer

What should be the role of an information services steering committee?

Correct AnswerverifiedShow Answer

What is automatic rollback?

Correct AnswerverifiedShow Answer

Which of the following control activities would most likely influence the behavior of managers?

Correct AnswerverifiedShow Answer

What is the most likely source of errors in a computerized accounting system?

Correct AnswerverifiedShow Answer

What are general computer controls?

Correct AnswerverifiedShow Answer

A trend is a movement away from programming controls into computer software and toward placing controls in human operating procedures.

Correct AnswerverifiedShow Answer

While entering data into a cash receipts transaction file, an employee transposed two numbers in a numeric code. Which of the following controls would have prevented this type of error?

Correct AnswerverifiedShow Answer

Performance measures should be quantitative as opposed to qualitative.

Correct AnswerverifiedShow Answer

General controls apply to the reliability and consistency of the overall information processing environment. To what do application controls apply?

Correct AnswerverifiedShow Answer

What kind of input control is involved when a self-checking digit is appended to a customer account number?

Correct AnswerverifiedShow Answer

In the process of identifying control activities, you must first identify risks.

Correct AnswerverifiedShow Answer

Duties that should be segregated are authorization of transaction and other events, custody of assets, and modification or creation of related data and program files.

Correct AnswerverifiedShow Answer

Physical controls protect assets from theft and destruction.

Correct AnswerverifiedShow Answer

Describe the process of cryptography using private and public keys.

Correct AnswerverifiedIf a business requests sensitive data fr...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Ongoing monitoring includes various comp...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
If a business requests sensitive data fr...
View Answer