Ais Chapter 7

Front 1

Business process control plans relate to those controls particular to a specific process or subsystem, such as billing or cash receipts.

A) True
B) False

Back 1

True

Front 2

According to the 2008 Report to the Nation on Occupational Fraud and Abuse, frauds are more likely to be detected by audits or internal controls than through tips.

A) True
B) False

Back 2

False

Front 3

Establishing a viable internal control system is primarily the responsibility of:

A) the external auditors
B) management
C) programmers
D) government authorities

Back 3

B

Front 4

Which component of the ERM framework is best described here: Management selects whether to avoid, accept, reduce, or share risk-developing a set of actions to align risks with the entity's risk tolerances and risk appetite.

A) control activities
B) event identification
C) risk assessment
D) risk response

Back 4

D

Front 5

A process captures only authorized transactions but fails to record them only once. Which control goal does this fail to achieve?

A) Validity
B) Accuracy
C) Completeness
D) Effectiveness

Back 5

C

Front 6

A control that involves reprocessing transactions that are rejected during initial processing is an example of:

A) preventive controls
B) detective controls
C) corrective controls
D) programmed controls

Back 6

C

Front 7

____ are the policies and procedures that help ensure that the risk responses are effectively carried out.

A) Control environment
B) Risk assessment
C) Control activities
D) Monitoring

Back 7

C

Front 8

Events that could have a negative impact on organizational objectives:

A) Controls
B) embezzlement
C) Fraud
D) Risks

Back 8

D

Front 9

____ is a process that evaluates the quality of internal control performance over time.

A) Control environment
B) Risk assessment
C) Control activities
D) Monitoring

Back 9

D

Front 10

The correct sequence of the control hierarchy, from top to bottom, is:

A) control environment, IT general controls, pervasive controls, business process controls
B) business process controls, IT general controls, pervasive controls, control environment
C) business process controls, control environment, pervasive controls, IT general controls

Back 10

C

Front 11

The major reasons for exercising control of the organization's business processes include:

A) to provide reasonable assurance that the goals of the business are being achieved
B) to mitigate risks of fraud and other intentional and unintentional acts
C) to provide reasonable assurance that the company is in compliance with applicable legal and regulatory obligations
D) all of the above

Back 11

D

Front 12

The effect of an event's occurrence is:

A) control
B) impact
C) risk
D) opportunity

Back 12

B

Front 13

The ERM framework addresses four categories of management objectives. Which category addresses the effective and efficient use of resources?

A) compliance
B) operations
C) reporting
D) strategic

Back 13

B

Front 14

Three terms used in the chapter to refer to when a control plan is exercised are ____________, ___________ and corrective control plans.

Back 14

Preventative, Detective