eparation of duties in establishing internal controls? accountant should not share information with the 7) duties 7) What is the concept behind A) The company's financial company's tax accountant s less likely to occur when access to assets and access to accounting records are separated C) Duties of middle-lev vel managers should be clearly separated from those of top D) The external auditors of the company should have no contact with managers while the audit is taking place 8) Giving only management the right to make purchases over a certain amount is an example of which preventive control? A) Employee management C) Separation of duties. B) Proper authorization D) Physical controls. 9 9) The act of collusion refers to: A) Management working with an auditor to prevent occu B) Top management and lower-level employees working together to share pational fraud. information necessary for effective internal controls. C) Two D) Middle-level managers taking full responsi or more people acting in coordination to circumvent internal controls. bility for effective internal controls. 10) 10) The term commonly used to refer to short-term investments that have a maturity date no longer than three months from the date of purchase is: A) Cash equivalents. C) Accounts payable. B) Accounts receivable. D) Short-term investments. 11) I1) Common examples of cash equivalents include all of the following except: A) Certificates of deposit. C) Money market funds. B) Accounts receivable. D) Treasury bills. 12) 12) A bank reconciliation reconciles the bank statement with the company's: A) Net income in the income statement. B) Cash from operating activities. C) Cash account in the balance sheet D) Net cash flow in the statement of cash flows