Exam (elaborations)
ACG Chapter 7 (1)
Exam of 7 pages for the course ACG 201 at ACG 201 (ACG Chapter 7 (1))
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ACG Chapter 7Any act by management or employees of a business involving an intentional deception for
personal gain. - ANS-fraud
Embezzlement of cash
Theft of assets
Filing of false insurance claims
Financial statement fraud - ANS-types of fraud
fraud is a ____________ - ANS-Punishable crime
3 parts of the fraud - ANS-pressure, rationalization, opportunity
Nearly all frauds committed by individuals under either financial or vice _________. -
ANS-pressure
_____________ fraud is often associated with pressure to "make the numbers." - ANS-Financial
statement
Most fraudsters come up with _______ to overcome the feeling of guilt. - ANS-rationalizations
Fraud only attempted if there is a ________ to get away with it. - ANS-chance
Measures undertaken by a business to ensure the reliability of the accounting data, protect
assets from unauthorized use, and ensure employees are following policies and procedures. -
ANS-internal controls
internal controls Reduce the likelihood of _______, Catch any ________ that may occur, -
ANS-errors
internal control is the responsibility of - ANS-management
the COSO Framework stands for - ANS-Committee on sponsoring organizations
COSO five internal control components: - ANS-1. Control Environment
2. Risk Assessment
3. Control Activities
4. Information and Communication
5. Monitoring
The ________ sets the tone for the organization. - ANS-control environment
, Provides the foundation for all other internal control components - ANS-control environment
The control environment includes: - ANS-Management philosophy and style
Assignment of authority and responsibility
Process for attracting and developing competent employees
Reward system
_____ is the possibility that an event will occur that will have a negative impact on the
organization. - ANS-Risk
Risk assessment involves __________ and _________ relevant risks. - ANS-identifying,
analyzing
Risk assessment is an ________ dynamic and iterative process. - ANS-ongoing
_____________ are the specific policies and procedures designed to reduce risk. - ANS-Control
activities
Control Activities can be either a ________ control or a ______- control. - ANS-prevention,
detection
______________ controls are intended to deter a problem before it occurs, whereas
_______________ controls are designed to uncover problems after they occur. -
ANS-Prevention, detection
______________ is much more desirable than detection. - ANS-Prevention
It is almost always less expensive to _____ a problem than it is to recover from one. -
ANS-prevent
A company should incorporate the following elements when it designs its prevention and
detection controls:
- Establish clear lines of _____ and responsibility
- Implement _______ of duties
- Hire_______ personnel
- Use ______ numbers on all business documents
- Develop plans and ______
- Maintain adequate________ records
- Provide physical and electronic _______ - ANS-authority
segregation
competent
control
budgets
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