Certified Management Accountant Internal Controls 3

Question 1

According to Sarbanes-Oxley Section 302, who must certify the effectiveness of disclosure controls and procedures?

Accepted Answer

CEO and CFO

Answer

SOX Section 302 requires the CEO and CFO to personally certify the effectiveness of the company's disclosure controls quarterly.

Question 2

Which of the following is an example of an application control rather than a general IT control?

Accepted Answer

Input validation edits on a data entry screen

Answer

Input validation edits are application controls that operate within a specific application to ensure data integrity at the transaction level.

Question 3

The 'control environment' in the COSO framework is often called the foundation of internal control because it:

Accepted Answer

Sets the tone and culture influencing how other controls operate

Answer

The control environment establishes the tone at the top and organizational culture, which directly affects the effectiveness of all other control components.

Question 4

A walkthrough in internal control testing involves:

Accepted Answer

Tracing a transaction from initiation to final recording

Answer

A walkthrough traces a single transaction through all process steps to confirm controls are designed as described and are operating.

Question 5

Which internal control principle requires that employees' recorded responsibilities match their actual duties?

Accepted Answer

Establishment of responsibility

Answer

Establishment of responsibility assigns specific duties to specific individuals so accountability can be maintained.

Certified Management Accountant Practice Test

Certified Management Accountant Practice Test

Certified Management Accountant Internal Controls 3