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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