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Acct 3122 > Module 4 (Ch 9-13) > Flashcards

Module 4 (Ch 9-13) Flashcards

1
Q

Risk and Control: The company’s background check provider does not have an independent internal control report in place.

A

Risk: Violating employment or privacy laws may result in lawsuits, fines, legal penalties, or reputational damage.
Control: Require vendors with access to confidential information to have an internal control report or perform other vendor risk management procedures prior to engagement

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2
Q

Risk and Control: There is no formal process in place for internal/external job posting and recruitment.

A

Risk: Potential labor regulation compliance issues.
Control: Implement a formal process for internal/external job posting and recruitment

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3
Q

Control Owner #1 and #2: Complete payroll processing checklist.

A

Payroll manager and N/A

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4
Q

Control Owner #1 and #2: Review and approve the payroll journal before the distribution of payments.

A

HR manager and N/A

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5
Q

Control Owner #1 and #2: Mail annual tax report (W-2) to each employee for tax filing purposes.

A

Payroll manager and N/A

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6
Q

Control Owner #1 and #2: Conduct an independent review of employees receiving paychecks by comparing the list to other credible employee listings, such as an active company directory.

A

HR Manager and N/A

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7
Q

Control Owner #1 and #2: Provide a payroll calendar to employees.

A

Payroll manager and N/A

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8
Q

Control Owner #1 and #2: Review and sign payroll checks.

A

Payroll manager and Controller

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9
Q

Control Owner #1 and #2: Reconcile list of employees receiving W-2s to employee main table to account for all employees.

A

Controller and N/A

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10
Q

Control Owner #1 and #2: Distribute payroll expense reports to department managers for explanations of significant variances.

A

Payroll manager and Department manager

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11
Q

Control Owner #1 and #2: Perform changes to personal information directly via an online portal.

A

Employee and HR manager

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12
Q

Control Owner #1 and #2: Review and remit payments for payroll withholdings on a timely basis to government agencies.

A

Accounting manager and N/A

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13
Q

Risk: Reconcile the list of employees receiving W-2s to the employee main table to verify that the company accounts for all employees.

A

Noncompliance with statutory requirements may result in fines, interest payments, and other penalties.

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14
Q

Risk associated with the lack of this control: Periodically review physical assets.

A

Improper use of the asset.

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15
Q

Risk associated with the lack of this control: Perform fixed asset reconciliations.

A

Fixed asset being expensed instead of capitalized.

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16
Q

Risk associated with the lack of this control: Initially approve fixed asset purchase.

A

Fraudulent bidding or approval of non-budgeted items.

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17
Q

Risk associated with the lack of this control: Tag fixed assets.

A

Fixed asset being expensed instead of capitalized.

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18
Q

Risk associated with the lack of this control: Have employee review and sign code of conduct.

A

Fraudulent bidding.

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19
Q

Risk associated with the lack of this control: have management review acquisition agreements.

A

Fraudulent bidding or approval of non-budgeted items.

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20
Q

Control Owner #1 and #2: Obtain vendor tax forms.

A

Director and VP of operations

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21
Q

Control Owner #1 and #2: Allow only authorized personnel to access ordering programs.

A

IT manager and N/A

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22
Q

Control Owner #1 and #2: Set limits on the amounts of purchases.

A

Director and VP of operations

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23
Q

Control Owner #1 and #2: Create a receiving location at physical facilities.

A

Facility manager and N/A

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24
Q

Control Owner #1 and #2: Train purchasing employees.

A

HR manager and N/A

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25
Q

Control Owner #1 and #2: Prevent owner of vendor file from selecting vendors.

A

Purchasing manager and N/A

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26
Q

Control Owner #1 and #2: Prevent receiving employees from authorizing purchases.

A

Director and VP of operations

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27
Q

Control Owner #1 and #2: Install cameras in the receiving areas.

A

Facility manager and N/A

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28
Q

Control Owner #1 and #2: Train receiving employees

A

HR manager and N/A

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29
Q

Control Owner #1 and #2: Three-way match a purchase order, receiving report, and vendor invoice.

A

AP manager and N/A

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30
Q

Control owner and area: Annual review of employee performance is performed.

A

HR Director in all areas

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31
Q

Control owner and area: Access to the warehouse is limited to authorized employees only.

A

COO in Inventory management

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32
Q

Control owner and area: Inventory counts are completed on a monthly basis.

A

CFO in Manufacturing operations

33
Q

Control owner and area: The system creates purchase requisitions and orders electronically based on customer demand.

A

Automated system control in Inventory management

34
Q

Control owner and area: Production decisions made by management must be based on sales forecasting, product profitability analysis, and inventory management.

A

CEO in Production planning and scheduling.

35
Q

Control owner and area: The inventory records must be periodically reconciled to the control accounts in the general ledger and to the physical inventory on hand.

A

CFO in Inventory management

36
Q

Control owner and area: Documented policies and procedures for product safety and quality include roles and responsibilities of inspectors and the handling of exceptions

A

COO in Quality management

37
Q

Control owner and area: Product costs are standardized and reviewed and revised regularly, in accordance with documented policies and procedures.

A

CFO in Product cost management

38
Q

Control owner and area: Policies and procedures related to the review, change, and authorization of existing bills of material, operations lists, and production schedules are clearly documented.

A

COO in Production planning and scheduling

39
Q

Risk: Ensure that a policy for sales cut-off timing is documented and approved.

A

Improper revenue recognition.

40
Q

Risk: Create programming that calculates sales discounts.

A

Loss of profit.

41
Q

Risk: Use standard sales contracts that are authorized by management.

A

Customer dissatisfaction or loss of reputation and penalties.

42
Q

Risk: Do automated matching of sales invoice quantities to shipping information and to the pricing in the sales contract.

A

Incorrect sales revenue and accounts receivable records and potential misstatement of financial statements.

43
Q

Risk: Automated the creation of monthly statements for customers.

A

Inflated revenue, incorrect customer accounts, customer dissatisfaction.

44
Q

Risk: Implement a policy that states cash is not accepted and only cards can be used for payment.

A

Loss of revenue resulting in financial loss.

45
Q

Risk: Check remittance advices against the daily remittance list.

A

Incorrect accounts receivable records and potential misstatement of financial statements.

46
Q

Risk: Control access to the warehouse.

A

Customer dissatisfaction, complaints, and financial losses.

47
Q

Risk: Automate the matching of the customer’s name on the sales order to a main data list for customers.

A

Fraudulent or inappropriate sales.

48
Q

Data, Analytic, or Report: Customers with the same phone number.

A

Analytic

49
Q

Data, Analytic, or Report: Product description

A

Data

50
Q

Data, Analytic, or Report: Calculating sales ratios

A

Analytic

51
Q

Data, Analytic, or Report: Review of shipments without an invoice

A

Analytic

52
Q

Step name and timing: Receive an order for $5,000 of inventory.

A

Journalize accounting transactions during reporting period.

53
Q

Step name and timing: Close income summary.

A

Journalize and post closing entries during reporting period.

54
Q

Step name and timing: Run quarterly TB.

A

Prepare unadj TB at end of reporting period.

55
Q

Step name and timing: Run finalized general ledgers balances.

A

Prepare post-closing TB during reporting period.

56
Q

Step name and timing: Record pament for advertising that will start in one month.

A

Journalize accounting transactions during reporting period.

57
Q

Step name and timing: Run statement of cash flows.

A

Prepare financial statements at end of reporting period.

58
Q

Step name and timing: Make agreement to purchase new warehouse.

A

Identify transactions during reporting periods.

59
Q

Step name and timing: Post debit entry to AP and credit entry to cash.

A

Post JEs to ledgers during reporting period.

60
Q

Step name and timing: Finalize AJEs and run GL balances.

A

Prepare adj. TB at end of reporting period.

61
Q

Step name and timing: Run statement of owners equity.

A

Prepare financial statements at end of reporting period.

62
Q

Step name and timing: Close expense accounts.

A

Journalize and post closing entries during reporting period.

63
Q

Step name and timing: Equipment is bought on a sales terms of 2/10 net 30.

A

Journalize accounting transactions during reporting period.

64
Q

Job Order Costing

A

Assigns cost or product to a unique job.

65
Q

Activity-Based Costing

A

Allocates indirect costs to cost pools.

66
Q

Conventional Cost Accounting

A

Allocated indirect costs based on volume.

67
Q

Period Costs

A

Expenses incurred but not part of the cost of the finished product.

68
Q

Control Owner and Area: The system analyzes standard and actual manufacturing costs and variances.

A

CFO in product cost management

69
Q

Can it be automated? Review reports and data for unusual trends or unexpected results.

A

No

70
Q

Can it be automated? Match revenue transactions with approved customer orders.

A

Yes

71
Q

Can it be automated? Provide a reporting hotline where whistleblowers remain anonymous.

A

No

72
Q

Can it be automated? Segregate billing function from shipping and AR functions.

A

No

73
Q

When a customer wishes to buy a product, the company receives a _________.

A

sales order

74
Q

For B2B sales, the main warehouse will receive a ________ which instructs them on the items that have been purchased and need shipped.

A

picking request

75
Q

To ensure that a customer receives the correct amount due for any purchases, the company sends out a ____________ to the customer.

A

sales invoice

76
Q

Risk: Some transactions are not recorded in US dollars.

A

Financial statements that do not comply with GAAP may result in regulatory fines or penalties.

77
Q

Risk: GL accounts do not have clearly assigned account owners.

A

Reporting complexities may result in financial statements and other reports may be inaccurate, unreliable or not issued in a timely manner.

78
Q

Risk: The company benefits plan is canceled.

A

Complex and non-routine accounting transactions may result in incorrect recording.

79
Q

Risk: Reviews on the inventory account are not occurring frequently.

A

Loss of assets due to fraud, theft, negligence, or destruction may result in lack of proper reflection in the financial statements.

Acct 3122 (4 decks)

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