50.1K

Verified Solution

Link Copied!

Fraud is an unintentional financial misstatement or the misappropriation of funds.

True

False

The conditions that lay the foundations for fraud include:

A. Poor internal controls or a poor internal control environment.

B. Existence of heavy financial pressures on individuals.

C. Other sources of pressure.

D. All of the above

There are seven basic elements needed to meet the broad objectives of good internal control. One of those consists of there being competent and trustworthy personnel, with clearly defined lines of ______________________

A. communication and openness.

B. trust and respect.

C. authority and responsibility.

D. relevance and reliability.

When dealing with revenue and recording transactions at Gross or Net the following steps take place EXCEPT

A. Create a revenue accounting procedure to specify the treatment of gross or net transactions.

B. Review the revenue accounting for potential pass-through transactions.

C. Ensure that the project expenses are charged to the correct account.

D. Trace commission payments back to underlying sale transactions.

The responsibility for an effective internal control system rest with________________

A. management.

B. investors.

C. creditors.

D. stockholders.

Management must take two fundamental steps in evaluating internal controls.

True

False

Answer & Explanation Solved by verified expert

See Answer