FAR — Financial Accounting & Reporting — Quiz 23

Questions in this quiz (10)

1. Which internal control component is responsible for ongoing evaluation of internal controls?

   • Control activities
   • Monitoring
   • Risk assessment
   • Information and communication

2. What is the main objective of risk assessment in internal control?

   • Eliminating fraud completely
   • Identifying and analyzing potential risks
   • Improving employee productivity
   • Recording financial transactions

3. Which internal control helps identify accounting errors?

   • Authorization procedures
   • Independent verification
   • Segregation of duties
   • Physical controls

4. Which internal control component reflects management's commitment to ethics and integrity?

   • Monitoring
   • Control environment
   • Control activities
   • Risk assessment

5. What is the primary purpose of segregation of duties?

   • Improve reporting speed
   • Reduce fraud risk
   • Increase automation
   • Improve efficiency

6. Which duties should be separated for better internal control over cash?

   • Recording transactions and approving purchases
   • Handling cash and recording transactions
   • Preparing financial statements and recording entries
   • Approving purchases and reconciling bank accounts

7. Which internal control ensures employees follow company policies?

   • Monitoring
   • Authorization procedures
   • Segregation of duties
   • Physical safeguards

8. Which is an example of a preventive control?

   • Bank reconciliation
   • Reviewing reports
   • Requiring approval before purchases
   • Internal audit

9. Which control identifies errors after they occur?

   • Preventive control
   • Detective control
   • Authorization control
   • Segregation control

10. What is the purpose of a bank reconciliation?

    • Record expenses
    • Compare company records with bank statement
    • Approve payments
    • Track revenue