Accounting Information System

1. A breach of the duty occurs when one fails to fulfill his or her duty to act reasonably in some aspect. Which of the following situations display the segregation of duties violation? i. ii. The warehouse clerk, who has the custodial responsibility over inventory in the warehouse, keeps the official inventory records The accounting clerk who shares the record keeping responsibility for the accounts receivable subsidiary ledger performs the monthly reconciliation of the subsidiary ledger and the control account. The sales manager has the responsibility to approve credit and the authority to write off accounts. The board of directors is assigning authority and responsibility of the company's goals and objectives to the company's Chief Executive Officer (CEO). iii. iv. A. i, ii, iii, iv B. i, ii, iv C. ii, iii, iv D. i, ii, iii 2. An audit trail is a step-by-step record on which accounting data can be traced to its source. is being implemented if an accounting system maintains a proper audit trail. Which of these internal control procedure functions relates to the statement above? A. access controls B. segregation C. independent verification D. accounting records 3. Robert Simons has espoused four levers of control to help management reconcile the conflict between creativity and controls. These are presented by i. Belief system that describes how a company creates value, helps employees understand management's vision, communicates company core values and inspires employees to live by those values. Boundary system that helps employees to act ethically by setting boundaries on employee behavior. iii. Appraisal system that helps to monitor the performance of employees. iv. Diagnostic control system that measures, monitors and compares actual company progress to budgets and performance goals. ii. A. i, ii, iii, iv B. i, ii, iv C. ii, iii, iv D. i, ii, iii 4. The accounts clerk at Mutiara Berhad, is in dilemma upon deciding the journal entries to conceal stolen cash receipts from the customer in payment of their accounts. In your opinion, which of the journal entries may be red by the accounts clerk? A. Debit Accounts Receivable, Credit Cash. B. Debit Cash, Credit Accounts Receivable. C. Debit Accounts Receivable, Credit Sales Returns. D. Debit Sales Returns, Credit Accounts Receivable. 5. "Establish a Code of Ethic within the organization that outlines the boundaries of unethical behavior. Require all employees to sign the code". Identify the type of internal controls that relates to the situation above. A. Application control. B. Diagnostic control C. Preventive controls D. Detective controls