Chapter 4

A weak internal control system is which element in the fraud triangle?

• A.Opportunity

• B.Motive

• C.Rationalization

• D.Attitude

Which of the following items is not true about fraud?

• A. It is designed to persuade another party to act in a way that causes injury or damage to that party.

• B. It can cause injury or damage to another party.

• C. Its damages must exceed a threshold of $150,000.

• D. It is an intentional misrepresentation of facts.

As part of a strong internal control system, which of the following accounting duties need to be separated from cash handling?

• A.Transaction approval

• B.Filing

• C.Record keeping

• D.Both A and C need to be separated from cash handling.

Each of the following represents an internal control procedure except for

• A.separation of duties.

• B.compliance monitoring.

• C. limited access to both assets and records.

• D.clear lines of authority and communication.

Fictitious accounting entries are recorded that cause revenue to be overstated by $5 million for the year; the accounting manager was trying to make the company's income look better on the company's upcoming loan application. This type of fraud is:

• A.fraudulent financial reporting.

• B.GAAP disordering.

• C.asset misappropriation.

• D.IFRS misalignment.