Financial Audit – Accounting And Finance Exam

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Financial Audit – Accounting And Finance Exam

The key terms in these Finance chapters include Financial Audit.


Evaluating effectiveness, efficiency, and goal achievement are objectives of ________ audits.

information systems

all of the above

financial

operationalCorrect


A serious exposure in the revenue cycle is loss of assets. What is the related threat and applicable control procedure that address this exposure?

making sales that turn out to be uncollectible; force sales people to make collection calls on customers with past due balances

shipping errors; reconciliation of sales order with picking ticket and packing slip

poor performance; preparation and review of performance reports

theft of cash; segregation of duties and minimization of cash handlingCorrect


Which of the following controls can minimize the threat of failure to bill?

Bar-code and RFID technology.

Use of cash registers.

Separation of billing and shipping functions.Correct

Restriction of access to master data.


If you believe a general ledger account was not adjusted properly or at all, you should prepare a general ledger control report listing journal vouchers in

chronological order.

any order, since you have to review them all anyway.

numerical sequence.

general ledger account number order.Correct


In which transaction cycle would information for inventory purchases be most likely to pass between internal and external accounting information systems?

the revenue cycle

the expenditure cycle – Correct

the human resources / payroll cycle

the financing cycle


The day after Christmas, Jane Olson, Chief Information Officer at American Trading Corporation (ATC), received some bad news. The hard drive use to store the company’s system data backups was lost while it was being transported to an offsite storage location. Jane called a meeting of her technical staff to discuss the implications of the loss. Which of the following is most likely to relieve her concerns over the potential cost of the loss?

ATC has a copy of the hard drive onsite, so a new copy for storage offsite can easily be prepared.

ATC has a comprehensive disaster recovery plan.

The hard drive was encrypted and password protected.Correct

The shipper has insurance that will reimburse ATC for the cost of the hard drive.


A fraud technique that allows a hacker to place himself or herself between a client and a host to intercept network traffic is called the ________ technique.

man-in-the-middleCorrect

salami

Trojan horse

trap door


Andile Uzoma is the CEO of Chibuzo Incorporated. The board of directors has recently demanded that they receive more assurance that internal controls surrounding the company’s information system are effective. Which type of audit would best suit the demands of the board of directors?

Operational audit.

Financial audit.

Information system audit.Correct

Sustainability audit.


Not all journal entries affect cash flow. Adjusting entries that reflect events that have already occurred, but have no effect on cash, are classified as

revaluations.

corrections.

accruals.Correct

deferrals.


XBRL stands for

extensible business reporting language.Correct

external business reporting ledgers.

external business reporting language.

extensive business report logic.


Evaluating effectiveness, efficiency, and goal achievement are objectives of ________ audits.

information systems

all of the above

financial

operational – Correct

A serious exposure in the revenue cycle is loss of assets. What is the related threat and applicable control procedure that address this exposure?

making sales that turn out to be uncollectible; force sales people to make collection calls on customers with past due balances

shipping errors; reconciliation of sales order with picking ticket and packing slip

poor performance; preparation and review of performance reports

theft of cash; segregation of duties and minimization of cash handling – Correct


Which of the following controls can minimize the threat of failure to bill?

Bar-code and RFID technology.

Use of cash registers.

Separation of billing and shipping functions. – Correct

Restriction of access to master data.


If you believe a general ledger account was not adjusted properly or at all, you should prepare a general ledger control report listing journal vouchers in

chronological order.

any order, since you have to review them all anyway.

numerical sequence.

general ledger account number order. – Correct


In which transaction cycle would information for inventory purchases be most likely to pass between internal and external accounting information systems?

the revenue cycle

the expenditure cycle – Correct

the human resources / payroll cycle

the financing cycle


The day after Christmas, Jane Olson, Chief Information Officer at American Trading Corporation (ATC), received some bad news. The hard drive use to store the company’s system data backups was lost while it was being transported to an offsite storage location. Jane called a meeting of her technical staff to discuss the implications of the loss. Which of the following is most likely to relieve her concerns over the potential cost of the loss?

ATC has a copy of the hard drive onsite, so a new copy for storage offsite can easily be prepared.

ATC has a comprehensive disaster recovery plan.

The hard drive was encrypted and password protected. – Correct

The shipper has insurance that will reimburse ATC for the cost of the hard drive.


A fraud technique that allows a hacker to place himself or herself between a client and a host to intercept network traffic is called the ________ technique.

man-in-the-middle – Correct

salami

Trojan horse

trap door


Andile Uzoma is the CEO of Chibuzo Incorporated. The board of directors has recently demanded that they receive more assurance that internal controls surrounding the company’s information system are effective. Which type of audit would best suit the demands of the board of directors?

Operational audit.

Financial audit.

Information system audit. – Correct

Sustainability audit.


Not all journal entries affect cash flow. Adjusting entries that reflect events that have already occurred, but have no effect on cash, are classified as

revaluations.

corrections.

accruals. – Correct

deferrals.


XBRL stands for

extensible business reporting language. – Correct

external business reporting ledgers.

external business reporting language.

extensive business report logic.


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