Chương 04 : Control and Accounting Information Systems (C7)

1) Why are threats to accounting information systems increasing?

A) Many companies do not realize that data security is crucial to their survival.
B) LANs and client/server systems are easier to control than centralized, mainframe systems.
C) Many companies believe that protecting information is a strategic requirement.
D) Computer control problems are often overestimated and overly emphasized by
management.

2) A control procedure designed so that the employee that records cash received from
customers does not also have access to the cash itself is an example of a(n)
A) preventive control.
B) detective control.
C) corrective control.
D) authorization control.

3) Identify the preventive control below.

A) reconciling the bank statement to the cash control account
B) approving customer credit prior to approving a sales order
C) maintaining frequent backup records to prevent loss of data
D) counting inventory on hand and comparing counts to the perpetual inventory records

4) Which of the following measures can protect a company from AIS threats?
A) Take a proactive approach to eliminate threats.
B) Detect threats that do occur.
C) Correct and recover from threats that do occur.
D) All of the above are proper measures for the accountant to take.

5) Which of the below is not a component of the COSO ERM?

A) monitoring
B) control environment
C) risk assessment
D) compliance with federal, state, or local laws

6) The COSO Enterprise Risk Management Integrated Framework stresses that

A) risk management activities are an inherent part of all business operations and should be
considered during strategy setting.
B) effective risk management is comprised of just three interrelated components; internal
environment, risk assessment, and control activities.
C) risk management is the sole responsibility of top management.
D) risk management policies, if enforced, guarantee achievement of corporate objectives.
7) Nolwenn Limited has been diligent in ensuring that their operations meet modern control
standards. Recently, they have extended their control compliance system by incorporating
policies and procedures that require the specification of company objectives, uncertainties
associated with objectives, and contingency plans. Nolwenn Limited is transitioning from a
________ to a ________ control framework.
A) COSO-Integrated Framework; COBIT
B) COBIT; COSO-Integrated Framework
C) COBIT; COSO-ERM
D) COSO-Integrated Framework; COSO-ERM
E) COSO-ERM; COBIT

8) Which internal control framework is widely accepted as the authority on internal controls?
A) COBIT
B) COSO Integrated Control
C) COSO Enterprise Risk Management
D) Sarbanes-Oxley Control Framework

9) Which of the following is not one of the five principles of COBIT5?

A) meeting stakeholder needs
B) covering the enterprise end-to-end
C) enabling a holistic approach
D) improving organization efficiency

10) The COBIT5 framework primarily relates to

A) best practices and effective governance and management of private companies.
B) best practices and effective governance and management of public companies.
C) best practices and effective governance and management of information technology.
D) best practices and effective governance and management of organizational assets.

11) Applying the COBIT5 framework, governance is the responsibility of

A) internal audit.
B) external audit.
C) management.
D) the board of directors.

12) Applying the COBIT5 framework, monitoring is the responsibility of

A) the CEO.
B) the CFO.
C) the board of directors.
D) all of the above

13) Why did COSO develop the Enterprise Risk Management framework?
A) to improve the audit process
B) to improve the risk management process
C) to improve the financial reporting process
D) to improve the manufacturing process
14) The largest differences between the COSO Integrated Control (IC) framework and the
COSO Enterprise Risk Management (ERM) framework is
A) IC is controls-based, while the ERM is risk-based.
B) IC is risk-based, while ERM is controls-based.
C) IC is required, while ERM is optional.
D) IC is more applicable to international accounting standards, while ERM is more applicable
to generally accepted accounting principles.