QUIZ NO.

3 – ACCOUNTING INFORMATION SYSTEM

NAME: _______________________________________________ DATE: ______________________________
ID NUMBER: ____________________________ SCORE: ______________ RATING: ________

MULTIPLE CHOICE B. Employee Fraud D. Incidental Fraud

Direction: Read and analyze the statements carefully. Encircle the letter of the answer
that best fits the corresponding item. 9. PCAOB pertains to:
A. Public Company Auditing Oversight Board
1. It is by using customer’s check from one account to cover theft from different account. B. Public Company Accounting Oversight Bureau
A. Charge to Expense Account C. Transaction Fraud C. Public Company Accounting Oversight Board
B. Lapping D. Customer Theft D. Public Company Audit of Batangas

2. The internal control objectives according to AICPA SAS are the following except: 10. A compensation for lack of segregation is ___________.
A. Ensure accuracy and reliability of accounting records and information A. Independent Verification C. Supervision
B. Promote efficiency of the firm’s operations B. Transaction Authorization D. Access Controls
C. Maximize shareholders’ wealth
D. Safeguard assets of the firm TRUE OR FALSE
Direction: Write TRUE if the statement is correct and FALSE if it is wrong on the space
3. It concerns on the social impact of computer technology. provided after the number.
A. IT Ethics C. Computer Ethics 11. Principal reforms of SOX Act include new federal crimes for the destruction of or
B. Social Ethics D. Professional Ethics tampering with documents, securities fraud, and actions against whistleblowers. TRUE
12. SOX Act means Sardanes-Oxley Act of 2002. FALSE
4. All of the following are conditions for fraud except: 13. Independent verification helps to safeguard assets by restricting physical access.
A. false representation C. intent TRUE
B. injury or loss D. material reliance 14. Fraudulent statements may be tied to focus on long-term financial measures for
success. FALSE
5. An accounting system that maintains an adequate audit trail is implementing which 15. Corruption includes bribery, illegal gratuities, conflict of interest and social extortion.
internal control procedure? FALSE
A. access controls C. independent verification 16. The AIS should produce high quality information which accurately records
B. segregation of functions D. accounting records transactions in the time period in which they occurred. TRUE
17. The weaker the internal control structure, the higher the assessed level of risk. TRUE
6. Which of the following not an underlying problem of Enron, Worldcom and Adelphia? 18. Application controls example is systems development and program maintenance.
A. Lack of Auditor Independence C. Lack of Director Independence FALSE
B. Inaapropriate Accounting Practice D. Authorization of 19. The cost of achieving objectives of internal control should not outweigh its benefits.
Transaction TRUE
20. Employees should be made aware of the firm’s commitment to ethics. TRUE
7. Frequently involves using financial statements to create an illusion that an entity is 21. The trend toward distributed data processing increases the exposure to fraud from
more healthy and prosperous than it actually is: remote locations. TRUE
A. Causal Fraud C. Management Fraud ENUMERATION
B. Employee Fraud D. Incidental Fraud Direction: Enumerate the EXPOSURES OF WEAK INTERNAL CONTROL. Give at
least four. Write your answer on the blanks provided.
8. Usually consists of: an employee taking cash or other assets for personal gain by  Destruction of an asset
circumventing a company’s system of internal controls:  Theft of an asset
A. Causal Fraud C. Management Fraud  Corruption of information
 Disruption of the information system