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Chapter 7 Quiz
Question 1
The most important element of the fraud triangle is rationalization.
Question 2
Requiring employees to take vacations is a weakness in the system of internal controls
because it does not promote operational efficiency.
Question 3
Under an effective system of internal control, errors occur only as a result of fraud or
dishonesty.
Question 4
Control over cash disbursements is improved if major expenditures are paid by check.
Question 5
Cash equivalents are highly liquid investments that can be converted into a specific amount
of cash.
Question 6
Which of the following is not one of the main factors that contribute to fraudulent activity?
Question 7
Under the concept of establishment of responsibility, how many people should have the
ultimate responsibility?
Question 8
A consequence of separation of duties is that
Question 9
In large companies, the independent internal verification procedure is often assigned to
Question 10
Sam‘s Grocery Store has the following policy. ‗Only one cashier can have access to a cash
drawer.‘ Which internal control principle supports this policy?
Question 11