Risk and Procedures for Control MCQs Paper

Multiple copies of the purchase order are prepared for recordkeeping and distribution with a copy of the purchase order sent to the vendor and one retained by the Purchasing Department. In addition, for proper informational flow and internal control purposes, a version of the purchase order would be distributed to the

Accounts Payable, Receiving, and Stores Control Departments.
Accounts Payable, Receiving, and Inventory Control Departments.Detailed Answer
Accounts Payable, Accounts Receivable, and Receiving Departments.
Accounts Payable, Receiving, and Production Planning Departments.

Responsibility for following up on any problems regarding orders of production materials and supplies, such as orders for which no acknowledgment has been received, orders overdue, partial orders, damaged or substandard merchandise received on an order, etc., would be entrusted to the

Inventory Control Department.
Stores Control Department.
Production Planning Department.
Purchasing Department.Detailed Answer

The documents that the Accounts Payable Department must review before it can properly authorize payment for the purchase of materials and supplies are

Vendor’s invoice, purchase requisition, and acknowledgment purchase order.
Vendor’s invoice, acknowledgment purchase order, and receiving report.
Vendor’s monthly statement, purchase order, and voucher
Vendor’s invoice, purchase order, and receiving reportDetailed Answer

One of the steps in assessing control risk in a computerized information control system is identifying necessary controls to prevent data from being lost, added, duplicated, or altered during processing. An example of this type of control is the

Authorization and approval of data in user departments and screening of data by data control groups.
Review of data output by data control groups.
Use of external and internal file labels.
Use of control totals, limit and reasonableness checks, and sequence tests.Detailed Answer

To control purchasing and accounts payable, an information system must include certain source documents. For a manufacturing organization, these documents should include

Purchase orders, receiving reports, and vendor invoices.
Receiving reports and vendor invoices.
Purchase requisitions, purchase orders, receiving reports, and vendor invoices. Detailed Answer
Purchase requisitions, purchase orders, inventory reports of goods needed, and vendor invoices

Which one of the following functions performed in an organization is a violation of sound principles of internal control?

A mail clerk opening the mail compares the check received with the source document accompanying the payment, either confirming or noting the amount paid, then forwards the checks daily (along with a listing of the cash receipts) to the cashier for deposit.
A mail clerk opening the mail compares the check received with the source document accompanying the payment, either confirming or noting the amount paid, then forwards the source documents that accompany the payments (along with a listing of the cash receipts) to Accounts Receivable, on a daily basis, for posting to the Subsidiary Ledger.
At the end of the week, the cashier prepares a deposit slip for all of the cash receipts received during the week.Detailed Answer
The General Ledger Department compares the summary journal entry, received from the cashier for cash receipts applicable to outstanding accounts, with the batch total for the posting to the Subsidiary Ledger by the Accounts Receivable Department.

Which one of the following methods for the distribution of employees’ pay would provide the best internal control for the organization?

Delivery of paychecks to each department supervisor, who in turn would distribute paychecks directly to the employees in his or her department.
Direct deposit in each employee’s personal bank account.Detailed Answer
Delivery of paychecks directly to each employee by a representative of the HR department
Delivery of paychecks directly to each employee by the payroll manager

The new controller of a company is evaluating her department for proper segregation of duties. Evaluate the following statements and determine which set of duties is acceptable to be performed by the same employee while still maintaining proper segregation of duties.

Receive the company’s deposits and record the transaction.
Collect the cash and checks and take the deposit to the bank.Detailed Answer
Enter expenses into the general ledger and pay the credit card bills.
Authorize cash disbursements and deliver the payments.

Which one of the following represents a technique that is most appropriate for an internal auditor to use to test the effectiveness of accounting recordkeeping controls?

Verify a receivable by comparing it to the accounting documentation.
Test a loan amount by sending a confirmation to the bankDetailed Answer
Perform an inquiry as to the timeliness of reconciliation completion.
Analyze the actual results to the budget and identify variances.

An Internet gaming company uses many laptops in its office and needs to ensure that they are adequately safeguarded. Which one of the following best represents a control that the company should use for its laptops?

Bolt the laptops in place or attach them with strong adhesives.
Keep a copy of all relevant details on the hard drives of the laptops.
Be able to identify the model and serial number for the laptops.Detailed Answer
Ensure that any virus programs have been identified on the laptops

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Risk and Procedures for Control Paper 12