Cash may not include:

A) Foreign currency.

B) Money orders.

C) Accounts receivable.

D) Undeposited customer checks.

Answer: Accounts receivable.

Which of the following is considered cash for financial reporting purposes?

A) Accounts receivable.

B) Investments with maturity dates greater than three months.

C) Checks received from customers.

D) Accounts payable.

Answer: Checks received from customers.

The asset most susceptible to theft is:

A) Equipment.

B) Accounts receivable.

C) Building.

D) Cash.

Answer: Cash.

The act of collusion refers to:

A) Top management and lower-level employees working together to share information necessary for effective internal controls.

B) Two or more people acting in coordination to circumvent internal controls.

C) Management working with an auditor to prevent occupational fraud.

D) Middle-level managers taking full responsibility for effective internal controls.

Answer: Two or more people acting in coordination to circumvent internal controls.

Which employees have an impact on the operation and effectiveness of internal controls?

A) Upper management.

B) Mid-level managers.

C) Lower-level employees.

D) All employees.

Answer: All employees.

Which employees are the ones who must take final responsibility for the establishment and success of internal controls?

A) Top executives.

B) Mid-level managers.

C) Lower-level employees.

D) All employees.

Answer: Top executives.

Having an independent party assess each year the adequacy of the company's internal control procedures is an example of which detective control?

A) Separation of duties.

B) Reconciliations.

C) Performance reviews.

D) Audits.

Answer: Audits.