Part I (60 Points) Theory 1. The purpose of the Sarbanes-Oxley Act is to restore public confidence and trust in the financial reporting of companies. A True. B. False. IMPORTANT 2. Internal control consists of policies and procedures used by a company to A. Safeguard its assets. B. Process information accurately. C. Compliance with laws and regulations. D. All of the above. 3. At ASU Bookstore, a sales employee assists customers with finding the items the customer wishes to purchase, ringing up the purchase and collecting the cash. At the end of the day, this employee counts the cash and fills out a cash-count form. Which internal control procedure is being violated by ASU Bookstore? A. Establish responsibilities. B. Separate recordkeeping from custody of assets. C. Divide responsibilities for related transactions. D. All of the above. VJS 4. The human element of controls and cost-benefit considerations are two limitations of internal control A. True. B. False. 5. For strong internal control over cash, it is important to have the duties related to cash receipts and cash payments be divided among different employees. A. True. B. False. 6. The amount of deposits in transit is included on the bank reconciliation as a(n) A. Deduction from the balance per the company books. B. Deduction from the balance per bank statement. C. Addition to the balance per bank statement. D. Addition to the balance per company books