Chapter 3 AIS

Which of the following is NOT an element of the fraud triangle?
a. justifiable reliance
b. situational pressure
c. opportunity
d. ethics

A

Which of the following benefits is least likely to result from a system of internal controls?
a. some assurance of compliance with the foreign corrupt practices act of 1977
b. some assurance that important documents and records are protected
c. prevention

C

Passive techniques designed to reduce the frequency of occurrence of undesirable events are
a. detective controls
b. application controls
c. IT controls
d. corrective controls
e. preventive controls

E

The phrase "borrowing from Peter to pay Paul" is most similar to the concept of transaction fraud.
a. True
b. False

B

Providing timely information about transactions in sufficient detail to permit proper classification and financial reporting is an example of:
a. risk assessment
b. information and communication
c. monitoring
d. the control environment

B

There are exactly two ethical principles that offer guidance for ethical responsibility: proportionality and justice.
a. True
b. False

B

Shell company fraud and pass-through fraud are different names for the same scheme.
a. True
b. False

B

Devices, techniques, and procedures designed to identify and expose undesirable events are
a. application controls
b. IT controls
c. preventive controls
d. corrective controls
e. detective controls

E

Which of the following is not a component of the COSO framework?
a. database management
b. control environment
c. risk assessment
d. control activities
e. monitoring

A

Bribe and Illegal gratuities are synonymous for the same fraudulent act.
a. True
b. False

B

Which piece of legislation requires management of public companies to assess the effectiveness of the organization's internal controls?
a. SOX 404
b. PCAOB
c. SOX 302
d. SAS 109

A

Which of the following is often called a compensating control?
a. access control
b. transaction authorization
c. accounting records
d. segregation of duties
e. supervision

E

Which of the following is not a type of physical control?
a. supervision
b. IT controls
c. accounting records
d. segregation of duties
e. access control

B