The following set of items describes activities completed by a company in purchasing and paying for merchandise. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. Checks are signed by designated officers in the finance department
a. Adheres to sound internal control procedures
b. Violates sound internal control procedures
c. Neither strengthens nor violates internal control
a
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Transfer pricing is a term that applies to transactions between different divisions or units of the same company
Indicate whether the statement is true or false
______ rules tell us what messages count as what and how our messages and behaviors are to be interpreted.
a. Social b. Interaction c. Constitutive d. Regulative
Which of the following is not one of the underlying principles of an effective control environment as developed by COSO?
a. The organization demonstrates a commitment to integrity and ethical values. b. The board of directors demonstrates independence from management and exercises oversight for the development and performance of internal control. c. Management establishes, with board oversight, structures, reporting lines, and appropriate authorities and responsibilities in pursuit of objectives. d. The organization considers the potential for fraud in assessing risks to the achievement of objectives.
Which of the following does not relate to The Public Company Accounting Oversight Board (PCAOB)?
a. Two members of the board must be CPAs. b. In addition to appointing the five members of the PCAOB, the SEC is responsible for the oversight and enforcement authority over the Board. c. The PCAOB consists of five members appointed by the SEC. d. The PCAOB is to adopt auditing standards. e. The PCAOB is to adopt accounting standards.