Which internal control methodology provided below would be thebest solution to resolve the following problem?The accountant had trouble reconciling how many cheques wereused and the cheques that were left over.a. 1-Establishment of responsibilityb.C. 3-Documentation proceduresd.2-Segregation of dutiese.4- Physical and IT controls5-Independent checks of performance

Iess chances of frauds if there exists a proper internal control system exists with In the entity…

Answered: Which internal control methodology…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter9: Auditing The Revenue Cycle.

Section: Chapter Questions

Problem 12CYBK

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Which of the following is false about accounting information systems? A. They provide reports that people analyze. B. They prevent errors and stop employees from stealing inventory. C. They are designed to gather data about the companys transactions. D. They consist of processes that involve input of data from source documents, processing, output, and storage.
Assume that management is gathering evidence as part of its process for assessing the effectiveness of internal control over financial reporting. The company is a manufacturer of high-dollar specialized Control Tested machines used in the medical profession. The following table identifies important controls that management is testing regarding accounts related to revenue recognition, accounts receivable, and other sales related activities. The first column describes the control, and the second column describes the test results. Based on the test results, determine the conclusion that management should likely make about the deficiency. (Is it a control deficiency, a significant deficiency, or a material weakness?)
Question 1 To what does the following relate: The Internal Auditors perform random testing on controls to ensure that they are operating effectively 1. Control activities – access controls 2. Monitoring of controls 3. Inherent limitations – cost vs benefit 4. Inherent limitations – human error, time constraints Question 2 The following is not one of the five components of internal control. 1. Control Environment 2. Entity’s risk assessment process 3. Information system 4. Segregation of duties Question 3 To what does the following relate: All invoices are pre-printed, sequentially numbered, and pre-numbered 1. Control activities – documentation and records 2. Validity of transactions 3. Monitoring of controls 4. Inherent limitations-human error, time constraints Question 4 To what does the following relate: Before a purchase of inventory can be made, it has to be…
When processing controls within the accounting information system may not leave visible evidence that could be inspected by audit teams, the teams shoulda. Make corroborative inquiries.b. Observe the separation of duties of personnel.c. Review transactions submitted for processing and compare them to related output.d. Review the run manual.
Which of the following is NOT a general control?* a. Backup of live data b. Use of passwords c. Setting an acceptable range for working hours d. Calamity-proof IT facilities ABOUT AUDITING/ACCOUNTING TOPICS
Which of the following statements about an accounting information system (AIS) is incorrect ?(CPA adapted) a. The information produced by AIS is made available to all levels of management for use in planning andcontrolling an organization’s activities.b. An AIS is best suited to solve problems where there is great uncertainty and ill-defined reportingrequirements.c. An AIS supports day-to-day operations by collecting and storing data about an organization’s transactions d.An AIS provides adequate controls to safeguard the assets, to ensure that the assets and data areavailable when needed, and to ensure that data/information is accurate and reliable
One aspect of internal control requires companies to maintain adequate documentation and records. Which of the following statements is not correct with respect to an entity's maintenance of documents and records? A. Documents should be pre-numbered only if the client has no other means to maintain records of which documents have been used. B. Documents should be pre-numbered consecutively to facilitate control over missing documents. C. Documents should be sufficiently simple to ensure that they are clearly understood. D. Documents should be prepared at the time a transaction occurs or as soon thereafter as possible.
Internal controls do each of the following except: A. Evaluate performance of employees B. Guarantee the accuracy if account records C. Protect assets D. Increase the likelihood that any errors will be caught
Which of the following is false about accounting information systems?A. They provide reports that people analyze.B. They prevent errors and stop employees from stealing inventory.C. They are designed to gather data about the company’s transactions.D. They consist of processes that involve input of data from source documents, processing, output, andstorage.
Which of the following does not demonstrate internal control practices? a. Allowing access of accounting computers to everyone b. Development of written policies and procedures c. Performing regular reconciliations of accounts d. Ensuring that cashier and bookkeeping duties are segregated
1. What are the collective procedures implemented by management to ensure that business activities are properly recorded in the accounting system? a.internal accounting system b.double-entry accounting system c.business system d.internal control system 2. A company limits access to computerized accounting records. What can be said of this procedure? a.It is a good example of physical controls. b.It violates adequate documents and records. c.It violates proper segregation of duties. d.It is a good example of independent checks on performance. 3. What element of internal control would include the setting of "tone at the top"? a.control environment b.risk assessment c.monitoring d.control activities
A company limits access to computerized accounting records. What can be said of this procedure? a.It is a good example of physical controls. b.It violates adequate documents and records. c.It violates proper segregation of duties. d.It is a good example of independent checks on performance.

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