1.In response to a large number of high profile cases involving accountingfraud, the U. S. Congress in 2002 passedthe:

A.Internal Revenue Fraud Act.

B.Securities and Exchange Commission Fraud Act.

C.Federal Reserve Act.

D.SarbanesOxley Act.

2.UnderSOX, the Chief Executive Officer and Chief Financial Officer must sign offon:

A.all quarterly reports by the company.

B.all annual and quarterly reports by the company.

C.all annual reports by the company.

D.the externalauditor's opinion.

3.One of the biggest factors in implementing SOXwas:

A.disclosing deficiencies in internal controls.

B.the cost of implementing the system.

C.reviewing the financial reports.

D.establishing internal control procedures.

4.What is an auditopinion?

A.Prepared by the independentaccountants, this is a written evaluation of the effectiveness of governance.

B.Prepared bymanagement, this is a written evaluation of the effectiveness of the internal controls.

C.Prepared by the independentaccountants, this is a written evaluation of thecompany's financial statements.

D.Prepared bymanagement, this is a written evaluation of the quality of work done by the independent accountants.

5.Which element of internal control deals with the oversight of the internal controlsystem?

A.Monitoring

B.Risk assessment

C.Control environment

D.Information and communication

6.Which of the following would be considered a part of control activities in an internal controlsystem?

A.Having a leadership philosophy

B.Separation of duties

C.Locating weaknesses in an internal control system

D.Having large quantities of cash on hand

7.The Fraud Triangle is used to show the connection of the factors necessary to commit fraud by or against an organization.

True or False?

8.________ embezzlement is a form of fraud committed against an organization.

A.Management

B.Employee

C.Stockholder

D. Board of directors

9.Committing a fraud because of a gambling addiction or excessive debt is an exampleof:

A.rationalization.

B.perceived opportunity.

C.realization.

D.perceived pressure.

10.Audits confirm the validity and reliability of accounting information.

True or False?

11.Certified Public Accountants perform external audits of a company to confirm that the financial statements are fairly presented according to GAAP.

True or False?

12.The SarbanesOxley Act requires acompany's stockholders to be more responsible.

True or False?

13.The SarbanesOxley Act only applies to publicly traded companies.

True or False?