CBAD 201 EXAM 2 QUESTIONS AND ANSWERS
What are two most common types of fraud? - CORRECT ANSWER✅✅misappropriation of assets and
fraudulent financial reporting
3 Parts of the Fraud Triangle - CORRECT ANSWER✅✅motive, opportunity, rationalization
What is the primary way that fraud is detected? - CORRECT ANSWER✅✅Internal Control
Example of important internal control - CORRECT ANSWER✅✅payments by check or eft
When a company receives customers' checks by mail: - CORRECT ANSWER✅✅all incoming mail
containing checks from customers should be opened by the mailroom
How is interest revenue handled in a bank reconciliation? - CORRECT ANSWER✅✅added to the book
balance
general rule that all major groups of transactions should be supported by either hard copy documents or
electronic records is part of what control procedure - CORRECT ANSWER✅✅adequate records
What law requires public companies to document all internal control and have it audited? - CORRECT
ANSWER✅✅Sarbanes Oxley (2002)
What are the 5 key components of a good control system? - CORRECT ANSWER✅✅good control
environment, good risk assessment, good information system, control procedures, monitor controls
What is a good control environment? - CORRECT ANSWER✅✅act ethically, follow rules set by top
management's example
What is good risk assessment? - CORRECT ANSWER✅✅identify risk to the company and have a plan if it
happens
What are two most common types of fraud? - CORRECT ANSWER✅✅misappropriation of assets and
fraudulent financial reporting
3 Parts of the Fraud Triangle - CORRECT ANSWER✅✅motive, opportunity, rationalization
What is the primary way that fraud is detected? - CORRECT ANSWER✅✅Internal Control
Example of important internal control - CORRECT ANSWER✅✅payments by check or eft
When a company receives customers' checks by mail: - CORRECT ANSWER✅✅all incoming mail
containing checks from customers should be opened by the mailroom
How is interest revenue handled in a bank reconciliation? - CORRECT ANSWER✅✅added to the book
balance
general rule that all major groups of transactions should be supported by either hard copy documents or
electronic records is part of what control procedure - CORRECT ANSWER✅✅adequate records
What law requires public companies to document all internal control and have it audited? - CORRECT
ANSWER✅✅Sarbanes Oxley (2002)
What are the 5 key components of a good control system? - CORRECT ANSWER✅✅good control
environment, good risk assessment, good information system, control procedures, monitor controls
What is a good control environment? - CORRECT ANSWER✅✅act ethically, follow rules set by top
management's example
What is good risk assessment? - CORRECT ANSWER✅✅identify risk to the company and have a plan if it
happens
