KCHAP 4-5

CH5

"To ensure that purchases are made at the best possible price."

Which one of the following best describes the above statement?

• A A risk

• B A control objective

• C A control procedure

• D A test of control

CH5

Small companies have no need for internal control systems.

• A True

• B False

CH5

Small companies can use unsophisticated methods of control to compensate for the lack of formal controls.

• C True

• D False

CH5

Small companies have difficulty with implementing segregation of duties controls.

• E True

• F False

CH5

Bank reconciliations are prepared on a monthly basis.

• A Preventative

• B Detective

CH5

Management accounts are compared on a monthly basis against the budget.

• C Preventative

• D Detective

CH5

Supplier statements are reconciled with trade payables balances.

• E Preventative

• F Detective

CH5

Which three of the following are likely roles of the audit committee?

• A To review the working papers of the external audit firm

• B To monitor the independence of the external auditor

• C To monitor the effectiveness of the company's internal audit function

• D To make recommendations to the board in relation to the external auditor

CH5

Training of staff in use of computer programs:

Password protection of the computer system:

Back-up power sources:

Computer maintenance agreements and insurance:

• E General

• F Application

CH5

One-for-one checking of processed output to source documents:

Cyclical review of master files:

• A General

• B Application