Compliance and Auditing Internal Controls 2

Question 1

What is an 'IT general control' (ITGC) in the context of SOX compliance?

Accepted Answer

Controls that apply broadly across IT systems to ensure overall IT integrity

Answer

A policy for general computer use

Answer

A firewall configuration standard

Answer

General guidelines for IT purchasing

Question 2

What is the purpose of a 'management review control' in financial reporting?

Accepted Answer

To provide oversight through management's review and approval of financial results and reports

Answer

To allow management to override audit findings

Answer

To review employee performance

Answer

To assess the external auditor's work

Question 3

Which principle requires that all financial transactions be supported by adequate documentation?

Accepted Answer

Documented evidence

Answer

Dual control

Answer

Audit trail integrity

Answer

Record retention

Question 4

What is a 'user access review' (UAR) in IT compliance?

Accepted Answer

A periodic review of user accounts and access rights to ensure they remain appropriate

Answer

A review of user satisfaction with IT systems

Answer

An assessment of user training completion

Answer

A review of IT help desk tickets

Question 5

What does 'dual control' mean in banking and financial compliance?

Accepted Answer

Requiring two authorized individuals to complete a critical transaction

Answer

Using two different accounting systems

Answer

Having two layers of management approval

Answer

Using two separate bank accounts

Question 6

What is the primary purpose of a bank reconciliation as an internal control?

Accepted Answer

To verify that the company's cash records match the bank's records and identify discrepancies

Answer

To prepare the annual financial statements

Answer

To calculate interest earned on deposits

Answer

To authorize wire transfers