Ch 7: Internal Control and Cash

The Sarbanes-Oxley Act applies only to companies whose stock is traded on public exchanges. True/False

Sarbanes-Oxley's purpose is to maintain public confidence and trust in the financial reporting of companies. True/False

There are three internal control objectives and they are to safeguard the company's reputation, ensure accurate financial reports, and ensure compliance with applicable laws. True/False

The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures. True/False

Sarbanes-Oxley requires companies to maintain strong and effective internal controls and thus deter fraud and prevent misleading financial statements. True/False

Sarbanes-Oxley applies to -publicly held companies - privately held businesses - not-for-profit organizations - All of these choices are correct.

"To maintain public confidence and trust in the financial reporting of companies" is the purpose of -GAAP -the FASB -Sarbanes-Oxley -the IRS

Which one of the following below is not an element of internal control? - information and communication - risk assessment - monitoring - cost-benefit considerations

Which one of the following is not a factor that influences a business's control environment? - personnel policies - proofs and security measures - management's philosophy and operating style - organizational structure

When a firm uses internal auditors, it is adhering to which of the following internal control elements? - risk assessment - proofs and security measures - information and communication - monitoring

When one of the following is NOT an element of internal control? A. Control environment B. Monitoring C. Compliance with laws and regulations D. Control procedures

In preparing a bank reconciliation, the amount of checks outstanding would be deduct be:

A petty cash fund is reimbursed when the amount of money in the fund is reduced to a predetermine minimum amount True/False

A person receiving cash should not deposit cash True/False