Tag: Ethics

The following is an example of an internal control which operates at Big Staffie plc.

In each example, select which control activity is illustrated:

– The finance director compares monthly expenditure on consumables to the budgeted expenditure.

Select ONE answer:

1. Information processing
2. Authorisation
3. Performance review
4. Segregation of duties

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct => Performance review includes reviews and analyses of actual performance against budgets, forecasts and prior period performance.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following is an example of an internal control which operates at Big Staffie plc.

In each example, select which control activity is illustrated:

– The financial accountant signs the bank reconciliation, which was prepared by a member of his staff.

Select ONE answer:

1. Information processing
2. Authorisation
3. Performance review
4. Segregation of duties

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct =>   Authorisation showing that the accountant has reviewed the reconciliation.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

ISA (UK) 315 states that an internal control system in an organisation consists of five components:

• the control environment
• the entity’s risk assessment process
• the information system
• the control activities
• the monitoring of controls

For each of the following examples, select the component which it illustrates:

-Review by management of monthly bank reconciliations

Select ONE answer:

1. the monitoring of controls
2. the control activities
3. the entity’s risk assessment process
4. the control environment

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct =>   Monitoring of controls involves reviewing the effectiveness of controls and whether they need improvement; thus, management’s review of monthly bank reconciliations is part of that monitoring system.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

ISA (UK) 315 states that an internal control system in an organisation consists of five components:

• the control environment
• the entity’s risk assessment process
• the information system
• the control activities
• the monitoring of controls

For each of the following examples, select the component which it illustrates:

-The entity’s organisational structure

Select ONE answer:

1. the control activities
2. the entity’s risk assessment process
3. the monitoring of controls
4. the control environment

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct => The entity’s organisational structure is part of the entity’s control environment.

This work is licensed under a Creative Commons Attribution 4.0 International License.

An audit committee is a committee with responsibility for audit-related matters.

Which ONE of the following could be members of an effective audit committee?

Select ONE answer:

1. Executive directors only
2. Non-executive directors and internal auditors
3. Non-executive directors only
4. Non-executive directors and external auditors

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct => An audit committee is made up of non-executive directors only
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.