Match the following terms with their definitions Internal control a. two or more

Question

Match the following terms with their definitions

Internal control             a. two or more people working together to overcome internal control

Control procedures    b. part of internal control that ensures resources are not wasted.

Firewalls                   c. requires companies to review internal control and take responsibility for the accuracy and completeness of their financial support

Encryption                    d. should be pre-numbered to prevent theft and inefficiency.

Environment                 e. limits access to a local network.

Information system     f. example: the person who opens the bank statement should not also be the person who is reconciling cash.

Separation of duties     g. identification of uncertainties that may arise due to a company’s products, services, or operations.

Collusion                         h. examination of a company’s financial statements and accounting system by a trained accounting professional

Documents                        i. without a sufficient one of these, information cannot properly be gathered and summarized.

Audits                          

                                           j. the organizational plan and all the related measures that safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate and reliable accounting data.

Operational efficiency                                  k. component of internal control that helps ensure business goals are achieved.

Risk assessment               l. rearrange data by a mathematical process.

Sarbanes-Oxley Act                                    m. to establish one, a company’s CEO and top managers must behave honorably to set a good example for employees.     

Explanation / Answer

Internal control              j. the organizational plan and all the related measures that safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate and reliable accounting data.

Control procedures         k. component of internal control that helps ensure business goals are achieved.

Firewalls       e. limits access to a local network.

Encryption              l. rearrange data by a mathematical process.    

Control Environment                m. to establish one, a company’s CEO and top managers must behave honorably to set a good example for employees.     

Information system          i. without a sufficient one of these, information cannot properly be gathered and summarized.

Separation of duties     f. example: the person who opens the bank statement should not also be the person who is reconciling cash.

Collusion                a. two or more people working together to overcome internal control

Documents    d. should be pre-numbered to prevent theft and inefficiency.

Audits    h. examination of a company’s financial statements and accounting system by a trained accounting professional

Operational efficiency        b. part of internal control that ensures resources are not wasted.

Risk assessment              g. identification of uncertainties that may arise due to a company’s products, services, or operations.

Sarbanes-Oxley Act c. requires companies to review internal control and take responsibility for the accuracy and completeness of their financial support

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