ACCT 427 - CH.10 COMPLETE
QUESTIONS AND ANSWERS {
GUARANTEED A+}
Which of the following is true regarding the Foreign Corrupt Practices Act (FCPA)
and Sarbanes-Oxley Act (SOX)? - ✔✔SOX was passed in the early 2000's,
required companies to have internal controls, and have the controls be audited.
The Public Company Accounting Oversight Board PCAOB) does... -
✔✔Oversees auditors.
Which of the following statements is false regarding corporate management
structure? - ✔✔The Audit Committee is always comprised of: the CFO,
Controller, and Internal Audit Manager.
Why does the audit committee exist? - ✔✔To avoid conflict of interest between
auditors and company management.
, Which of the following is a component of the Internal Control (cube) framework? -
✔✔Control Environment.
There are two internal control frameworks: IC and ERM. ERM stands for... -
✔✔Enterprise Risk Management
A cost/benefit analysis should be performed to determine the extent of controls
needed to address risks in the ___________ component of the COSO framework. -
✔✔Risk Assessment
During a recent review, ABC Corporation realized that they have a serious internal
control problem. It is estimated that the impact associated with this problem is $1
million and the likelihood is currently 5%. Two internal control procedures have
been proposed to deal with this problem. Procedure A would cost $25,000 and
reduce likelihood to 2%; procedure B would cost $30,000 and reduce likelihood to
1%. If you consider only the estimates of cost and benefit, which procedure should
be implemented? - ✔✔Procedure B
What is the purpose of Foreign Corrupt Practices Act (FCPA)? - ✔✔First piece of
regulation that required US companies to maintain good systems of internal
control. The main purpose is to prevent businesses from accepting bribes from
foreign officials.
QUESTIONS AND ANSWERS {
GUARANTEED A+}
Which of the following is true regarding the Foreign Corrupt Practices Act (FCPA)
and Sarbanes-Oxley Act (SOX)? - ✔✔SOX was passed in the early 2000's,
required companies to have internal controls, and have the controls be audited.
The Public Company Accounting Oversight Board PCAOB) does... -
✔✔Oversees auditors.
Which of the following statements is false regarding corporate management
structure? - ✔✔The Audit Committee is always comprised of: the CFO,
Controller, and Internal Audit Manager.
Why does the audit committee exist? - ✔✔To avoid conflict of interest between
auditors and company management.
, Which of the following is a component of the Internal Control (cube) framework? -
✔✔Control Environment.
There are two internal control frameworks: IC and ERM. ERM stands for... -
✔✔Enterprise Risk Management
A cost/benefit analysis should be performed to determine the extent of controls
needed to address risks in the ___________ component of the COSO framework. -
✔✔Risk Assessment
During a recent review, ABC Corporation realized that they have a serious internal
control problem. It is estimated that the impact associated with this problem is $1
million and the likelihood is currently 5%. Two internal control procedures have
been proposed to deal with this problem. Procedure A would cost $25,000 and
reduce likelihood to 2%; procedure B would cost $30,000 and reduce likelihood to
1%. If you consider only the estimates of cost and benefit, which procedure should
be implemented? - ✔✔Procedure B
What is the purpose of Foreign Corrupt Practices Act (FCPA)? - ✔✔First piece of
regulation that required US companies to maintain good systems of internal
control. The main purpose is to prevent businesses from accepting bribes from
foreign officials.
