Digital Watermark & Control Risk – Accounting Quiz

Digital Watermark, Control Risk, Audit Planning, Data, System Control

The key terms in these Finance chapters include Control Risk, Audit Planning, Data, System Control, Audit, Digital Watermark, Encryption System, Digital Signature, Audit Evidence, The Dodd-Frank Act, HIPAA, HITECH, Embedded Code, Digital Documents.


Control risk is defined as the

risk auditors will not be given the appropriate documents and records by management who wants to control audit activities and procedures.

susceptibility to material risk in the absence of controls.

risk that a material misstatement will get through the internal control structure and into the financial statements. – Correct

risk that auditors and their audit procedures will not detect a material error or misstatement.


The purpose of ________ is to determine why, how, when, and who will perform the audit.

the communication of audit results

audit planningCorrect

the collection of audit evidence

the evaluation of audit evidence


Using embedded audit modules to continuously monitor transactions, collect data on transactions with special audit significance, and store the data to later identify and investigate questionable transactions is an example of

snapshot technique.

integrated test facility.

system control audit review file.Correct

audit hooks.


The Bear Corporation uses a tool that embeds a code into all of its digital documents. It then scours the internet, searching for codes that it has embedded into its files. When Bear finds an embedded code on the internet, it knows that confidential information has been leaked. Bear then begins identifying how the information was leaked and who was involved with the leak. Bear is using

a data loss prevention software.

an information rights management software.

a digital watermark.Correct

a stop leak software.


Identify the item below which is not a piece of legislation passed to protect individuals against identity theft or to secure individuals’ privacy.

The Gramm––Leach––Bliley Act.

The Health Insurance Portability and Accountability Act (HIPAA).

The Dodd-Frank Act.Correct

The Health Information Technology for Economic and Clinical Health Act (HITECH).


A client approached Paxton Uffe and said, “Paxton, I need for my customers to make payments online using credit cards, but I want to make sure that the credit card data isn’t intercepted. What do you suggest?” Paxton responded, “The most effective solution is to implement

a data masking program.”

a virtual private network.”

a private cloud environment.”

an encryption system with digital signatures.”Correct


Control risk is defined as the

risk auditors will not be given the appropriate documents and records by management who wants to control audit activities and procedures.

susceptibility to material risk in the absence of controls.

risk that a material misstatement will get through the internal control structure and into the financial statements.Correct

risk that auditors and their audit procedures will not detect a material error or misstatement.


The purpose of ________ is to determine why, how, when, and who will perform the audit.

the communication of audit results

audit planningCorrect

the collection of audit evidence

the evaluation of audit evidence


Using embedded audit modules to continuously monitor transactions, collect data on transactions with special audit significance, and store the data to later identify and investigate questionable transactions is an example of

snapshot technique.

integrated test facility.

system control audit review file.Correct

audit hooks.


Which of the following is not a potential effect of inaccurate data on employee time cards?

Increased labor expenses.

Damaged employee morale.

Inaccurate calculation of overhead costs.Correct

Erroneous labor expense reports.


Professional employer organizations (PEOs) are especially attractive to small and mid-sized businesses for all of the following reasons except

wider range of benefits.

reduced costs.

improved service quality.Correct

freeing up computer resources.


Which item below is not considered a major input to the general ledger and reporting system?

financing and investing activities

adjusting entries

summary entries from the major subsystems

reports from managersCorrect

Control risk is defined as the

risk auditors will not be given the appropriate documents and records by management who wants to control audit activities and procedures.

susceptibility to material risk in the absence of controls.

risk that a material misstatement will get through the internal control structure and into the financial statements.Correct

risk that auditors and their audit procedures will not detect a material error or misstatement.


The purpose of ________ is to determine why, how, when, and who will perform the audit.

the communication of audit results

audit planningCorrect

the collection of audit evidence

the evaluation of audit evidence


Using embedded audit modules to continuously monitor transactions, collect data on transactions with special audit significance, and store the data to later identify and investigate questionable transactions is an example of

snapshot technique.

integrated test facility.

system control audit review file.Correct

audit hooks.


The Bear Corporation uses a tool that embeds a code into all of its digital documents. It then scours the internet, searching for codes that it has embedded into its files. When Bear finds an embedded code on the internet, it knows that confidential information has been leaked. Bear then begins identifying how the information was leaked and who was involved with the leak. Bear is using

a data loss prevention software.

an information rights management software.

a digital watermark.Correct

a stop leak software.


Identify the item below which is not a piece of legislation passed to protect individuals against identity theft or to secure individuals’ privacy.

The Gramm––Leach––Bliley Act.

The Health Insurance Portability and Accountability Act (HIPAA).

The Dodd-Frank Act.Correct

The Health Information Technology for Economic and Clinical Health Act (HITECH).


A client approached Paxton Uffe and said, “Paxton, I need for my customers to make payments online using credit cards, but I want to make sure that the credit card data isn’t intercepted. What do you suggest?” Paxton responded, “The most effective solution is to implement

a data masking program.”

a virtual private network.”

a private cloud environment.”

an encryption system with digital signatures.”Correct