FAR — Financial Accounting & Reporting — Quiz 26

Questions in this quiz (10)

1. Which internal control activity involves continuous review of internal control effectiveness?

   • Authorization procedures
   • Monitoring
   • Risk assessment
   • Control activities

2. Which control ensures only authorized personnel can approve transactions?

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

3. Which situation indicates weak internal control over cash?

   • Daily bank deposits
   • Same employee receives and records cash
   • Monthly bank reconciliations
   • Independent cash counts

4. Which internal control protects company assets from theft?

   • Risk assessment
   • Monitoring
   • Physical safeguards
   • Authorization procedures

5. Which control best detects payroll fraud?

   • Independent review of payroll
   • Authorization of purchases
   • Monitoring inventory
   • Segregation of duties in sales

6. Which internal control component evaluates risks affecting financial reporting?

   • Monitoring
   • Risk assessment
   • Control environment
   • Authorization procedures

7. Which internal control activity reviews financial statements for unusual trends?

   • Authorization procedures
   • Monitoring
   • Risk assessment
   • Physical controls

8. Which internal control principle separates authorization, custody, and recording?

   • Monitoring
   • Segregation of duties
   • Risk assessment
   • Authorization procedures

9. Which component ensures employees understand reporting procedures?

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

10. Which procedure helps verify inventory accuracy?

    • Authorization procedures
    • Physical inventory counts
    • Monitoring
    • Segregation of duties