Question 1
aq.ic.policies.004_1802
Internal control over entity cash receipts is not weakened when an employee
who initially receives all customer mail also:
Records credits to individual accounts receivable.
Prepares bank deposit slips for all mail receipts.
Prepares all journal entries for cash receipts.
Maintains a petty cash fund.
This Answer is Correct
This is correct. A situation where an employee receives customer mail
receipts and maintains the petty cash fund does not represent an internal
control weakness.
Question 2
1E1-LS29
When assessing a company's internal control structure policies and
procedures, the primary consideration is whether they:
* Source: Retired ICMA CMA Exam Questions.
affect the financial statement assertions.
reflect management's philosophy and operating style.
prevent management override.
relate to the control environment.
This Answer is Correct
The primary consideration when assessing a company's internal
control structure policies and procedures is whether they affect the
financial statement assertions.
Question 3
aq.ic.policies.005_1802
Effective internal control procedures over the payroll function may
include:
A payroll department employee verifies that the job time tickets agree with employee clock
card hours.
The employee who is responsible for a specific job reconciles the job time ticket totals with
the job reports.
An employee who reports to the supervisor of the personnel department also prepares the
, payroll transaction journal entries.
The supervisor of the payroll department has custody of rate authorization records.
This Answer is Correct
This is correct. Job time tickets and employee clock card hours may
be reconciled by the payroll department, which is independent of
both sets of records.
Question 4
1E1-LS06
Which of the following is a reason for independent checks?
To assess an employee and determine whether he or she is following control procedures
To ensure that management appears compliant with external audit standards
To detect and correct errors and misappropriation of assets
To ensure that mistakes can be corrected within the fiscal year they are made
This Answer is Correct
The correct answer is: To detect and correct errors and
misappropriation of assets
Independent checks are a preventive measure. They try to catch
mistakes before they become integrated into the financial system,
thus providing a higher level of assurance of financial integrity.
Question 5
aq.ic.policies.007_1802
In an audit of financial statements, an auditor's primary
consideration regarding an internal control policy or procedure is
whether the policy or procedure:
Reflects management's stated philosophy and operating style.
Provides adequate safeguards over access to entity assets and financial information.
Affects and impacts management's financial statement assertions.
Enhances management's decision-making processes.
This Answer is Correct
This is correct. The control policies and procedures established by
management are intended to address the assertions that
management is making in its financial statements. An auditor's
opinion provides independent verification that management's
assertions are correct.
Question 6
aq.ic.policies.006_1802
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