Accounting Information Systems: The Processes and Controls, 2nd Edition

END OF CHAPTER MATERIAL

CONCEPT CHECK

1. 1. The careful and responsible oversight and use of the assets entrusted to Management is called
   1. the control environment
   2. stewardship
   3. preventive controls
   4. security
2. 2. Which of the following is not a condition in the fraud triangle?
   1. Rationalization
   2. Incentive
   3. Conversion
   4. Opportunity
3. 3. There are many possible indirect benefits to management when management fraud occurs. Which of the following is not an indirect benefit of management fraud?
   1. Delayed exercise of stock options
   2. Delayed cash flow problems
   3. Enhanced promotion opportunities
   4. Increased incentive-based compensation
4. 4. Which of the following is not an example of employee fraud?
   1. Skimming
   2. Larceny
   3. Kickbacks
   4. Earnings management
5. 5. Which of the following is not a common form of employee fraud?
   1. Inventory theft
   2. Expense account fraud
   3. Payroll fraud
   4. Refund fraud
6. 6. Segregation of duties is a fundamental concept in an effective system of internal controls. Nevertheless, the effectiveness of this control can be compromised through which situation?
   1. A lack of employee training
   2. Collusion among employees
   3. Irregular employee reviews
   4. The absence of an internal audit function
7. 7. The most difficult type of misstatement to discover is fraud that is concealed by
   1. over-recording the transactions
   2. nonrecorded transactions
   3. recording the transactions in subsidiary records
   4. related parties
8. 8. The review ...