1. Which of the following is not a primary risk associated with the expenditure cycle transactions?

a. Ghost employee b. Approving orders from customers with bad credit standing c. Inaccurate recording of purchases d. Misappropriation of cash and inventory

2. One of the objectives why we need to impose controls on each process is to

a. establish an audit trail b. Save time and company resources c. Follow generally accepted practices regardless is such practices are not applicable to the size and nature of the business d. to micromanage employees

3. Which of the following is not an example of independent verification?

a. Cost accounting reconciles the materials and labor usage taken from materials requisitions and job tickets with the prescribed standards. b. The GL department also fulfills an important verification function by checking the total movement of products from WIP to FG. c. Firms limit access to sensitive areas, such as storerooms, production work centers, and FG warehouses. Control methods used include identification badges, security guards, observation devices, and various electronic sensors and alarms. d. internal and external auditors periodically verify the RM and FG inventories on hand through a physical count. They compare actual quantities against the inventory records and make adjustments to the records when necessary.