FAR — Financial Accounting & Reporting — Quiz 29

Questions in this quiz (10)

1. Which internal control procedure would most likely detect unauthorized payroll payments?

   • Authorization procedures
   • Independent reconciliation of payroll reports
   • Monitoring inventory levels
   • Segregation of duties in purchasing

2. Which internal control ensures that transactions have supporting evidence?

   • Monitoring
   • Adequate documentation
   • Segregation of duties
   • Risk assessment

3. Which internal control activity ensures employees comply with company procedures?

   • Authorization procedures
   • Monitoring activities
   • Physical safeguards
   • Risk assessment

4. What is the primary purpose of internal auditing?

   • Preparing financial statements
   • Evaluating internal controls and operational effectiveness
   • Recording accounting transactions
   • Preparing tax returns

5. Which control reduces the likelihood that one employee can commit fraud?

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

6. Which internal control helps ensure financial statements are accurate?

   • Physical safeguards
   • Independent verification of accounting records
   • Monitoring
   • Risk assessment

7. Which internal control requires employees to take mandatory leave?

   • Monitoring
   • Human resource controls
   • Risk assessment
   • Authorization procedures

8. Which internal control reviews financial data for unusual trends?

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

9. Which internal control component ensures effective communication of financial information?

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

10. Which procedure helps detect discrepancies in inventory records?

    • Authorization procedures
    • Periodic physical inventory counts
    • Risk assessment
    • Segregation of duties