Section 1 (Qs) - Management's Responsibility For Fraud

Front 1

A sarbanes-oxley act provides both civil and criminal penalties for retaliating against corporate whistleblowers.

Back 1

True

Front 2

Which of the following is incorrect regarding the code of ethics requirements under the sarbanes-oxley act?

A. The SEC believes that determining the particular sanctions for violations of the code of ethics is best left to the discretion of the company.

B. Public us companies must make publicly available the portions of their code of ethics that address the ethical considerations that apply to senior Financial officers.

C. The SEC has laid out specific language the must be included in all public us companies code of ethics for senior Financial officers.

D. Public us companies must disclose in their annual report whether they have adopted a code of ethics for senior Financial officers, and if they have not, they must explain their reasoning.

Back 2

The SEC has laid out specific language that must be included in all public us companies code of ethics for senior financial officer.

Front 3

For its compliance program to be effective, an organization must communicate the program to all its employees through training programs.

Back 3

True

Front 4

A corporation cannot be held criminally liable for its employees actions if there were specific policies in place that prohibited the activity undertaken by the employees.

Back 4

False

Front 5

Which of the following is one of the interrelated components of a company's internal control system, as laid out by COSO?

A. Risk assessment

B. Assurance function

C. Ethical Culture

D. Independent oversight

Back 5

Risk assessment

Front 6

According to COSO, the effectiveness of an overall system of internal controls can be determined by assessing whether several specific components are in place, functioning effectively, and operating together in an integrated manner.

Back 6

True

Front 7

According to COSO, internal control is a process "designed to provide reasonable Assurance regarding the achievement of objectives relating to operations, reporting, and compliance."

Back 7

True

Front 8

For companies that fall under the provisions of the sarbanes-oxley act, the CEO and CFO must personally certify the company's annual and quarterly SEC filings. Which of the following statements must be included in the certifications by the CEO and CFO?

A. That they are responsible for the company's internal controls.

B. Did they have disclose to their Auditors in the audit committee any fraud that involves employees who have a significant role in the internal controls.

C. That they have personally reviewed the company's financial statements.

D. All of these are correct.

Back 8

All of these are correct

Front 9

Which of the following elements is required for a corporate compliance program to be effective?

A. Consistent punishment for employees who violate the program.

B. Due diligence in the hiring process.

C. Appropriate incentives for compliance with the program.

D. All of these are correct.

Back 9

All of these are correct

Front 10

According to COSO, the control environment of an organization:

A. Is established by directors and Senior Management.

B. Sets the moral and ethical tone of the organization.

C. Provides the foundation for the overall internal control system.

D. All of these are correct.

Back 10

All of these are correct

Front 11

Which of the following factors should an organization consider when designing the components of its compliance and Ethics program?

A. Recurrence of similar conduct.

B. Organization size.

C. Industry size and standards.

D. All of these are correct.

Back 11

All of these are correct

Front 12

A mid-level manager at the XYZ company inflated Revenue figures to meet the company's quarterly targets. The officers and directors of XYZ did not know the fraud was occurring; therefore, the company cannot be held criminally liable for the fraud.

Back 12

False

Front 13

Which of the following parties is ultimately responsible for the prevention and detection of fraud within an organization?

A. External Auditors.

B. Internal Auditors.

C. Board directors.

D. Management.

Back 13

Management

Front 14

According to COSO, an internal control system should be designed to provide reasonable Assurance regarding the achievement of the organization's objectives pertaining to which of the following?

A. The Effectiveness and efficiency of the organization's operations.

B. The organization's adherence to the laws and regulations to which it is subject.

C. The reporting of Financial and non-financial information to internal and external parties.

D. All of these are correct.

Back 14

All of these are correct

Front 15

Harassing an employee of a non-public US company for testifying regarding an alleged violation of State Securities laws is a violation of The Whistleblower protections provided by the sarbanes-oxley act.

Back 15

False

Front 16

The sarbanes-oxley act requires all public us companies to adopt a code of ethics for senior Financial officers.

Back 16

False

Front 17

An organization can be held liable for an employee's act if management knew there was a high probability the act had occurred in consciously avoided confirming that fact.

Back 17

True

Front 18

According to the COSO internal control model, an organization should perform both ongoing evaluations and periodic, separate evaluations to ascertain whether the components of internal control are present and functioning.

Back 18

True

Front 19

COSO recommends that corporations Implement control activities through formal policies that establish what is expected and procedures that put policies into action.

Back 19

True

Front 20

Which of the following types of personnel can potentially bind a corporation through their own misconduct?

A. Independent contractors.

B. Executive officers and directors.

C. Low-level employees.

D. All of these are correct.

Back 20

All of these are correct

Front 21

It should be the compliance officers duty to help measure the compliance programs effectiveness.

Back 21

True

Front 22

Which of the following is a requirement regarding internal control over financial reporting (ICOFR) under the Sarbanes-Oxley Act?

A. Management must acknowledge its responsibility for establishing and maintaining adequate ICOFR.

B. The auditor must issue an opinion on Management's assessment of the ICOFR.

C. Management must identify the framework used in performing its assessment of ICOFR.

D. All of these are correct.

Back 22

All of these are correct

Front 23

Which of the following is not one of the principles involved in the risk assessment process, as laid out by COSO?

A. Considering the potential for fraud.

B. Assessing changes that could significantly impact the internal control system.

C. Conducting ongoing monitoring of the risk management strategy.

D. Setting clear organizational objectives.

Back 23

Conducting ongoing monitoring of the risk management strategy

Front 24

An organization's board of directors does not necessarily have to be knowledgeable about the implementation of an organization's compliance and Ethics program if the board has delegated that responsibility to a compliance officer.

Back 24

False

Front 25

COSO identified five interrelated components of _____.

Back 25

Internal control

Front 26

The U. S. Corporate Sentencing Guidelines require that a compliance and Ethics program is reasonably designed, implemented, and enforced so that it is generally effective in preventing and detecting criminal conduct.

Back 26

True

Front 27

Under the Us corporate sentencing guidelines, a failure to prevent or detect a particular instance of fraud does not necessarily mean that the organization's compliance program is ineffective.

Back 27

True

Front 28

Which of the following is true regarding the responsibilities and potential liability of corporate officers and directors of us companies with regard to fraud and misconduct?

A. The failure to create an adequate compliance system could render a director liable for losses caused by non-compliance.

B. Corporations face stiff penalties for failing to redress a parent misconduct by senior employees.

C. Officers and directors who are aware of potentially illegal conduct by senior employees may be liable for any recurrence of similar misconduct.

D. All of these are correct.

Back 28

All of these are correct.

Front 29

Which of the following offenses is addressed by The Whistleblower protections provided by the sarbanes-oxley act?

A. Firing an employee of a non-public us company for providing information about an alleged federal offense to law enforcement.

B. Firing an employee of a public us company for providing information as part of a fraud investigation.

C. Threatening an employee of a public us company for testifying regarding an alleged violation of Securities Law.

D. All of these are correct.

Back 29

All of these are correct

Front 30

Under us law, a corporation can be held responsible for the criminal acts of its employees if those acts are done in the course and scope of their employment and for the ostensible purpose of benefiting the coorporation.

Back 30

True

Front 31

Which of the following is a principle pertaining to the information and communication components of coso's internal control integrated framework?

A. The organization obtains or generates and uses relevant, quality information to support the functioning of internal control.

B. The organization internally communicates information- including objectives and responsibilities for internal control necessary to support the functioning of internal control.

C. The organization communicates with external parties regarding matters affecting the functioning of internal control.

D. All of these are correct.

Back 31

All of these are correct

Front 32

For a corporate compliance program to be effective, the company must proactively monitor, Audits, and evaluate the programs components.

Back 32

True

Front 33

Which of the following is one of the purposes of the Us corporate sentencing guidelines?

A. To provide guidance for judges when determining whether to convict an organization of a crime for wrongdoing perpetrated by its employees.

B. To provide incentives for organizations to maintain internal mechanisms for preventing, detecting, and Reporting criminal conduct.

C. To instruct States on how to sentence corporate offenders for federal crimes.

D. None of these are correct.

Back 33

To provide incentives for organizations to maintain internal mechanisms for preventing, detecting, and Reporting criminal conduct.

Front 34

In a public company, the CEO should be charged with having primary responsibility for the oversight of the company's compliance program.

Back 34

False

Front 35

Under Section 404 of the sarbanes-oxley act, public us companies must include all of the following in their annual report except:

A. A statement identifying framework used in performing the assessment of the effectiveness of internal controls over financial reporting.

B. Management's assessment of the effectiveness of a company's internal controls over financial reporting.

C. A report explaining any discovered deficiencies in the company's internal controls over financial reporting.

D. A statement of Management's responsibility for establishing and maintaining adequate internal controls over financial reporting.

Back 35

A report explaining any discovered deficiencies in the company's internal controls over financial reporting.