AIS Exam Questions 2025 With 100%
Correct Answers
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) - CORRECT
ANSWER✔✔preventive control
Which of the below is not a component of the COSO ERM? - CORRECT ANSWER✔✔compliance
with federal, state, or local laws
Why did COSO develop the Enterprise Risk Management framework? - CORRECT ANSWER✔✔to
improve the risk management process
According to the ERM, these help the company address all applicable laws and regulations. -
CORRECT ANSWER✔✔compliance objectives
According to the ERM, high level goals that are aligned with and support the company's mission
are - CORRECT ANSWER✔✔strategic objectives.
According to the ERM, ________ deal with the effectiveness and efficiency of company
operations, such as performance and profitability goals. - CORRECT ANSWER✔✔operations
objectives
________ is not a risk responses identified in the COSO Enterprise Risk Management
Framework. - CORRECT ANSWER✔✔Monitoring
,As a result of an internal risk assessment, Allstate Insurance decided it was not profitable to
provide hurricane insurance in the state of Florida. Allstate apparently chose to ________ the
risk of paying hurricane claims in Florida. - CORRECT ANSWER✔✔avoid
At a movie theater box office, all tickets are sequentially prenumbered. At the end of each day,
the beginning ticket number is subtracted from the ending number to calculate the number of
tickets sold. Cash is counted and compared with the number of tickets sold. Which of the
following situations does this control detect? - CORRECT ANSWER✔✔The box office cashier
accidentally gives too much change to a customer.
Best Friends, Incorporated is a publicly traded company where three BFF's (best friends forever)
serve as its key officers. This situation - CORRECT ANSWER✔✔increases the risk associated with
an audit.
________ objectives help ensure the accuracy, completeness and reliability of internal and
external company reports, Applying the ERM framework. - CORRECT ANSWER✔✔Reporting
objectives
Personnel policies such as background checks, mandatory vacations, and rotation of duties tend
to deter - CORRECT ANSWER✔✔employee fraud or embezzlement.
SAS No. 99 requires that auditors - CORRECT ANSWER✔✔understand fraud
Lapping is best described as the process of - CORRECT ANSWER✔✔applying cash receipts to a
different customer's account in an attempt to conceal previous thefts of cash receipts.
Which of the following is not a management characteristic that increases pressure to commit
fraudulent financial reporting? - CORRECT ANSWER✔✔close relationship with the current audit
engagement partner and manager
, Which of the following is a financial pressure that could cause an employee to commit fraud? -
CORRECT ANSWER✔✔having a spouse injured in a car accident and in the hospital for several
weeks
Which characteristic of the fraud triangle often stems from a lack of internal controls within an
organization? - CORRECT ANSWER✔✔opportunity
In the expenditure cycle, good control dictates that expenditures should be paid by check. This
may not be feasible when minor purchases are made. To facilitate quick payment for minor
purchases, a(n) ________ should be set up and maintained using ________. - CORRECT
ANSWER✔✔imprest petty cash fund; vouchers
Which of the following will not reduce the likelihood of an occurrence of fraud? - CORRECT
ANSWER✔✔adequate insurance coverage
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) - CORRECT
ANSWER✔✔preventive control.
Internal control is often referred to as a(n) ________, because it permeates an organization's
operating activities and is an integral part of management activities. - CORRECT
ANSWER✔✔process
Which of the following was not an important change introduced by the Sarbanes-Oxley Act of
2002? - CORRECT ANSWER✔✔new rules for information systems development
The COSO Enterprise Risk Management Integrated Framework stresses that - CORRECT
ANSWER✔✔risk management activities are an inherent part of all business operations and
should be considered during strategy setting.
Correct Answers
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) - CORRECT
ANSWER✔✔preventive control
Which of the below is not a component of the COSO ERM? - CORRECT ANSWER✔✔compliance
with federal, state, or local laws
Why did COSO develop the Enterprise Risk Management framework? - CORRECT ANSWER✔✔to
improve the risk management process
According to the ERM, these help the company address all applicable laws and regulations. -
CORRECT ANSWER✔✔compliance objectives
According to the ERM, high level goals that are aligned with and support the company's mission
are - CORRECT ANSWER✔✔strategic objectives.
According to the ERM, ________ deal with the effectiveness and efficiency of company
operations, such as performance and profitability goals. - CORRECT ANSWER✔✔operations
objectives
________ is not a risk responses identified in the COSO Enterprise Risk Management
Framework. - CORRECT ANSWER✔✔Monitoring
,As a result of an internal risk assessment, Allstate Insurance decided it was not profitable to
provide hurricane insurance in the state of Florida. Allstate apparently chose to ________ the
risk of paying hurricane claims in Florida. - CORRECT ANSWER✔✔avoid
At a movie theater box office, all tickets are sequentially prenumbered. At the end of each day,
the beginning ticket number is subtracted from the ending number to calculate the number of
tickets sold. Cash is counted and compared with the number of tickets sold. Which of the
following situations does this control detect? - CORRECT ANSWER✔✔The box office cashier
accidentally gives too much change to a customer.
Best Friends, Incorporated is a publicly traded company where three BFF's (best friends forever)
serve as its key officers. This situation - CORRECT ANSWER✔✔increases the risk associated with
an audit.
________ objectives help ensure the accuracy, completeness and reliability of internal and
external company reports, Applying the ERM framework. - CORRECT ANSWER✔✔Reporting
objectives
Personnel policies such as background checks, mandatory vacations, and rotation of duties tend
to deter - CORRECT ANSWER✔✔employee fraud or embezzlement.
SAS No. 99 requires that auditors - CORRECT ANSWER✔✔understand fraud
Lapping is best described as the process of - CORRECT ANSWER✔✔applying cash receipts to a
different customer's account in an attempt to conceal previous thefts of cash receipts.
Which of the following is not a management characteristic that increases pressure to commit
fraudulent financial reporting? - CORRECT ANSWER✔✔close relationship with the current audit
engagement partner and manager
, Which of the following is a financial pressure that could cause an employee to commit fraud? -
CORRECT ANSWER✔✔having a spouse injured in a car accident and in the hospital for several
weeks
Which characteristic of the fraud triangle often stems from a lack of internal controls within an
organization? - CORRECT ANSWER✔✔opportunity
In the expenditure cycle, good control dictates that expenditures should be paid by check. This
may not be feasible when minor purchases are made. To facilitate quick payment for minor
purchases, a(n) ________ should be set up and maintained using ________. - CORRECT
ANSWER✔✔imprest petty cash fund; vouchers
Which of the following will not reduce the likelihood of an occurrence of fraud? - CORRECT
ANSWER✔✔adequate insurance coverage
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) - CORRECT
ANSWER✔✔preventive control.
Internal control is often referred to as a(n) ________, because it permeates an organization's
operating activities and is an integral part of management activities. - CORRECT
ANSWER✔✔process
Which of the following was not an important change introduced by the Sarbanes-Oxley Act of
2002? - CORRECT ANSWER✔✔new rules for information systems development
The COSO Enterprise Risk Management Integrated Framework stresses that - CORRECT
ANSWER✔✔risk management activities are an inherent part of all business operations and
should be considered during strategy setting.
