Question details

CIS430 Unit 2 Quiz C3 Latest 2017
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Question 1

Which of the following is not a major factor that contributes to small business fraud?

Inadequate employee prescreening

Too much trust

Limited controls

Excessive cash on hand

Question 2

A shell company fraud involves:

stealing cash from an organization before it is recorded

stealing cash from an organization after it has been recorded

setting up a fake company and manufacturing false purchase orders, receiving reports, and invoices

A clerk pays a vendor twice for the same products and cashes the reimbursement check issued by the vendor

Question 3

When duties cannot be segregated, the most important internal control procedure is


independent verification

accounting records

access controls

Question 4

To conceal the theft of a check from customers in payment of their accounts, which of the following journal entries should the bookkeeper make?

Debit Miscellaneous Expense; Credit Cash

Debit Petty; Credit Cash

Debit Cash; Credit Accounts Receivable

Debit Sales Returns; Credit Accounts Receivable

None of the above

Question 5

Cash larceny involves stealing cash from an organization before it is recorded on the organization’s books and records



Question 6

When certain customers made cash payments to reduce their accounts receivable, the bookkeeper embezzled the cash and wrote off the accounts as uncollectible. Which control procedure would most likely prevent this irregularity?

segregation of duties

maintaining a general ledger

insuring debits equal credits in the accounting system

access controls

Question 7

2 out of 2 points


Which of the following indicates a strong internal control environment?

the internal audit group reports to the audit committee of the board of directors

there is no segregation of duties between organization functions

there are questions about the integrity of management

adverse business conditions exist in the industry

Question 8

Which of the following is not a limitation of the internal control system?

errors are made due to employee fatigue

fraud occurs because of collusion between two employees

the industry is inherently risky

management instructs the bookkeeper to make fraudulent journal entries

Question 9

The external auditor is responsible for establishing and maintaining the internal control system.



Question 10

Which of the following is NOT an element of the fraud triangle?

rationalization (ethics)

justifiable reliance

pressure (motive)




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