Strayer JWI530 Week 5 Knowledge Check Latest 2020 JULY

JWI530 FINANCIAL MANAGEMENT I

Week 5 Knowledge Check

Question 1According to the GAO Internal Controls article, the key elements of Internal Controls that should be a part of Enterprise Risk Management (ERM) includes which of the following components?

Answers:            

A. Monitoring Activities

B. Control Activities

C. Risk Assessment

D. All Answers are Correct

E. Control Environment

F. Information and Communication

Question 2You are a Division Manager and the administrative assistant, who is preparing an expense report for Frank, one of your direct reports, approaches you because she discovers that Frank used the company credit card to purchase jewelry for his wife. What is the best course of action to be taken by the Division Manager?

Answers:            

A. Just ignore it since he exceeded his sales goal by more than a million dollars for the last 3 years straight.

B. Call Internal Controls and Human Resources to start the termination process.

C. Schedule a meeting with Frank to review this personal purchase that was made on his company credit, advise him that he will need to pay for it immediately, and reinforce the credit card policy as it relates to making personal purchases.

D. Schedule a meeting with Frank to let him know that you caught him red-handed however next time, you will overlook it, as long as he also purchases jewelry for you as well.

Question 3Larry is an employee of Cracker Jack Electronics, and he needs his business travel expenses reimbursed, but must have approval for payment. He completes an expense report and attaches all of his receipts and submits it. Suzanna is Larry’s supervisor, and the assistant controller for Cracker Jack Electronics, and she is responsible for verifying Larry’s expense report and signing off on it for approval for reimbursement. This arrangement is called:

Answers:            

A. Separation of Functions

B. Labor-saving Productivity

C. Segregation of Duties

D. Both Separation of Functions and Segregation of Duties

E. Collusion

Question 4Which of the following is true as it relates to internal controls?

Answers:            

A. It is a set of rules or procedures that a company puts in place for conducting its business

B. It ensures that there is a system of checks and balances in place

C. It is aimed at protecting the integrity of financial information and safeguarding company assets

D. Prevents waste and misuse of assets and resources

E. Ensure bills are paid timely and that accounting transactions are recorded correctly

F. All of the Above

Question 5Who prepares, creates, and is solely accountable for the official Financial Statements of a publicly traded company?

Answers:            

A. The receptionist in the CEO’s office

B. A third-party independent Auditor

C. Company Management

D. A CPA with at least 20 years of experience

E. The Securities and Exchange Commission (SEC)

Question 6Match the following terms with their definition.

Question             Match   Selected Match

10-K

EDGAR

Annual Report

10-Q

All Answer Choices

A. An annual report required by the SEC, generally in simple text/data format, which summarizes key financial and operational highlights.

B. SEC database in the U.S., where all required financial disclosures and publications are stored and available for free to the public.

C. A quarterly report required by the SEC, generally in simple text/data format, which summarizes key financial and operational highlights.

D. Yearly publication from a company that describes the operational and financial results. It often comes in booklet form with glossy pages and shareholder communications with pictures, graphs, and images. Contains the full financial statements, management disclosure, and notes to the financial statements.

Question 7When a company uses I.D. Badges, a security guard or even a receptionist to limit or control access to the company office building, which type of internal control does this refer to?

Answers:            

A. Policies and Procedures

B. Separation of Duties

C. Barriers

D. Record Keeping

E. Inspection

Question 8You are the CEO of an organization, and you’re having a private, non-business dinner with a shareholder (who is not an employee but someone you have known since high school) one week before your company is expected to release its prior year financial results. In meeting with your CFO, you know there is a significant surprise profit shortfall coming from the Latin American organization. This shareholder says, "My kid is going off to college this fall, and things are really tight around my house since I just started my own business. I am so thankful your stock has been doing well. If it rises just a few more dollars in price, I am going to cash out so I can send her to school. Think we will see a boost in price after next week's earnings release?" Which of the following is the best response?

Answers:            

A. Tell your friend you are very sorry, but you are not allowed to comment on pending financial results.

B. Since this is only an individual investor and not an employee, it is acceptable to share this information, provided the person promises not to act on it or share it with anyone else.

C. Being very careful not to disclose any specifics or details, tell the person to consider selling some shares now.

D. Stop the conversation immediately and contact the authorities to report a breach of insider trading laws by your friend for asking you the question.

Question 9Under the Sarbanes-Oxley Act of 2002, executives of publicly held companies are held to a very high standard of ethical conduct. Because it is not possible for an executive to be aware of all that is transpiring in the organization, the SEC decided that senior executives are exempt from liability if they were not aware that a subordinate was cooking the books.

True

False

Question 10Internal Controls will be very effective as long as the senior management follows the policies, even if all other employees do not?

Answers:            

True

False