Week 5 exam

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Internal Control and Sarbanes-Oxley Quiz

Test your knowledge on internal controls, the Sarbanes-Oxley Act, and financial reporting with our comprehensive quiz. Designed for students, professionals, and anyone interested in the world of finance, this quiz covers key concepts surrounding internal controls in business.

Key Topics:

Sarbanes-Oxley Act
Internal Control Objectives
Control Environment
Monitoring and Assessment

18 Questions4 MinutesCreated by AnalyzingData512

There are two internal control objectives and they are to ensure accurate financial reports, and ensure compliance with applicable laws.

True

False

Sarbanes-Oxley requires companies to maintain strong and effective internal controls and thus prevent fraud and misleading financial statements.

True

False

The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures.

True

False

The control environment in an internal control structure is the attitude and awareness of internal control by all employees.

True

False

Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting.

True

False

Internal control is enhanced by separating the control of a transaction from the record-keeping function

True

False

Which one of the following below is not an element of internal control?

Risk assessment

Monitoring

Information and communication

Behaviour analysis

Which one of the following below is not a factor that influences a business's control environment?

Management's philosophy and operating style

Organisational structure

Proofs and security measures

Personnel policies

When a firm uses internal auditors, it is adhering to which one of the following internal control elements?

Risk assessment

Monitoring

Proofs and security measures

Separating responsibilities for related operations

The objectives of internal control are to

Control the internal organisation of the accounting department personnel and equipment

Provide reasonable assurance that operations are managed to achieve goals, financial reports are accurate, and laws and regulations are complied with

Prevent fraud, and promote the social interest of the company

Provide control over "internal-use only" reports and employee internal conduct

Which one of the following below reflects a weak internal control system?

All employees are well supervised

A single employee is responsible for comparing a receiving report to an invoice

All employees must take their vacations

A single employee is responsible for collecting and recording of cash

Internal control does not consist of policies and procedures that

Protect assets from misuse

Aid management in directing operations toward achieving business goals

Guarantee the company will not go bankrupt

Ensure that business information is accurate

A firm's internal control environment is not influenced by

Management's operating style

Organisational structure

Personnel policies

Monitoring policies

In management's internal control report that is now required of all public companies, which of the following does not have a direct effect on a company's internal control system?

Internal auditors

Independent accountants

Board of Director's audit committee

Board of Trustees

Week 5 exam

Internal Control and Sarbanes-Oxley Quiz

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