1. Establishing a hierarchy to let all management and employees know what is going on in a company would be an example of what element of internal control? a. Control environment b. Risk assessment c. Monitoring d. Information and communication 2. Safeguarding assets and ensuring proper reporting of financial information are two of the objectives of having an internal control system True or False 3. An audit opinion in which there are material misstatements in the financial statement is the: a. qualified opinion b. unqualified opinion c. disclaimer of opinion d. adverse opinion 4. U.S. GAAP has been organized into what is called the American Standards Code. True or False 5. An employee may embezzle by taking bribes or kickbacks from: a. suppliers b. customers c. both suppliers and customers d. stockholders of the company 6. Audits confirm the validity and reliability of accounting information True or False 7. The International Accounting Standards Board was formed in a. 2001 b. 1991 c. 1971 d. 1981 8. Behaving ethically and behaving legally are the same True or False 9. Internal control is a comprehensive system that helps an organization do all of the following EXCEPT: a. safeguard liabilities b. operate efficiently and effectively c. ensure compliance with applicable laws and regulations 10. In a broad sense, fraud is the use of deception or trickery for personal gain. True or False