Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 8, Problem 11MC
Which of the following is true about the Sarbanes-Oxley Act?
A. It was passed to ensure that internal controls are properly documented and tested by public companies.
B. It applies to both public and smaller companies.
C. It requires all companies to report their internal control policies to the US Securities and Exchange Commission.
D. It does not require additional costs or resources to have adequate controls.
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4 Which of the following is true about the Sarbanes-Oxley Act?A. It was passed to ensure that internal controls are properly documented and tested by publiccompanies.B. It applies to both public and smaller companies.C. It requires all companies to report their internal control policies to the US Securities and ExchangeCommission.D. It does not require additional costs or resources to have adequate controls.
In your own words, why are internal controls important? Why
do you think Congress has made it mandatory for public
companies to not only implement internal controls, but have
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Which law or regulation requires that public companies must maintain strong internal control systems?a. Dodd-Frank Actb. Sarbanes-Oxley Actc. Securities and Exchange Act of 1933d. Treadway Commission
Chapter 8 Solutions
Principles of Accounting Volume 1
Ch. 8 - Which of the following would a fraudster perceive...Ch. 8 - Internal control is said to be the backbone of all...Ch. 8 - What is the best way for owners of small...Ch. 8 - Which of the following is not considered to be...Ch. 8 - There are several elements to internal controls....Ch. 8 - A company is trying to set up proper internal...Ch. 8 - There are three employees in the accounting...Ch. 8 - Which one of the following documents is not needed...Ch. 8 - What is the advantage of using technology in the...Ch. 8 - Which of the following assets require the...
Ch. 8 - Which of the following is true about the...Ch. 8 - The external auditor of a company has certain...Ch. 8 - Petty cash is used to ________. A. avoid having to...Ch. 8 - A company has decided to start a petty cash fund...Ch. 8 - Which of the following items are found on a book...Ch. 8 - Which of the following are found on the bank side...Ch. 8 - What would be a reason a company would want to...Ch. 8 - What would be a reason a company would want to...Ch. 8 - At what point does revenue recognition occur? A....Ch. 8 - What is an example of perceived opportunity as one...Ch. 8 - What is an example of rationalization as one of...Ch. 8 - What is an example of incentive as one of the...Ch. 8 - Why is it important to have a very sound and...Ch. 8 - The information technology departments of all...Ch. 8 - What are the functions of the internal control?Ch. 8 - Discuss the importance of a company having proper...Ch. 8 - What is the role of the Sarbanes-Oxley Act and the...Ch. 8 - Why is it important to have a petty cash fund...Ch. 8 - Is it required to have only one petty cashier or...Ch. 8 - Technology can be used to support a strong...Ch. 8 - What is the purpose of the bank reconciliation?Ch. 8 - What should be done if differences are found...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - The bank reconciliation shows the following...Ch. 8 - The bank reconciliation shows the following...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - The bank reconciliation shows the following...Ch. 8 - The bank reconciliation shows the following...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - On September 1, French company has decided to...Ch. 8 - On May 2 Kellie Company has decided to initiate a...Ch. 8 - Domingo Company started its business on January 1,...Ch. 8 - Prepare a trial balance using the journal entries...Ch. 8 - Inner Resources Company started its business on...Ch. 8 - PA6. 8.4 Prepare a trial balance using the journal...Ch. 8 - Identify where each of the following transactions...Ch. 8 - Which of the following transactions will require a...Ch. 8 - Domingo Company received the following bank...Ch. 8 - Prepare the journal entry required to reconcile...Ch. 8 - Inner Resources Company received the following...Ch. 8 - Prepare the journal entry required to reconcile...Ch. 8 - On June 1 French company has decided to initiate a...Ch. 8 - On July 2 Kellie Company has decided to initiate a...Ch. 8 - Hajun Company started its business on May 1, 2019....Ch. 8 - Prepare a trial balance using the journal entries...Ch. 8 - Lavender Company started its business on April 1,...Ch. 8 - Prepare a trial balance for Lavender Company using...Ch. 8 - Identify where each of the following transactions...Ch. 8 - Which of the following transactions will require a...Ch. 8 - Hajun Company received the following bank...Ch. 8 - Prepare the journal entry required to reconcile...Ch. 8 - Leann Company received the following bank...Ch. 8 - Prepare the journal entry required to reconcile...Ch. 8 - A retail store normally has three people working...Ch. 8 - Visit a favorite eatery. Describe some of the...Ch. 8 - A manufacturing plant was finding a huge increase...Ch. 8 - The vice president of finance asks the accounts...Ch. 8 - Even though technology has improved the internal...Ch. 8 - A bank reconciliation takes time and must balance....Ch. 8 - The bank reconciliation revealed that one deposit...
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- The Sarbanes-Oxley Act (SOX) mandates that all publicly traded US corporations must: Select one: a. Maintain an adequate system of internal controls b. Top management must ensure the reliability of the controls c. Outside independent auditors must attest to the adequacy of the controls d. All of the above.arrow_forwardExplain one way the external auditor's responsibilities regarding a public company's system of internal controls have changed since SAS 78 became effective in the late 1990s. Were these changes necessary? Do you believe the changes have been effective at reducing risk for the company and the users of the financial statements? Explain your rationale.arrow_forwardThe main purposes of internal controls include all of the following except Multiple Choice prevention of error, theft, and fraud. promotion of efficiency. ensuring compliance with laws and regulations. increase the operating expenses of publicly traded companies.arrow_forward
- Which of the following is true of internal control? A. Internal control procedures tend to diminish the importance of operational efficiency. B. A company's outside auditor is responsible for the company's internal control system. C. Internal controls are only necessary for public companies. D. One of the major purposes of internal control is to ensure that the assets are safeguarded.arrow_forwardIndicate which of the following claims is true and which is untrue. Internal control processes' principal purpose is to protect the firm against theft by government entities.arrow_forwardWhat additional constraints and obligations do auditors face when offering nonaudit services to public companies?arrow_forward
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- That companies must follow the laws and regulations including company law, tax law and environmental protection regulations requires what category of internal control objectives? Financial reporting Effective operations. Compliance Government reportingarrow_forwardwhat are some examples of internal controls? How are internal controls related to the Sarbanes-Oxley legislation? Separately, what is the role of the internal audit function in an organization, and how does this function relate to internal control?arrow_forwardrespond to the following questions: Section 404 of the Sarbanes-Oxley Act of 2002 includes two sections. Describe those sections. Identify management’s four overall responsibilities with respect to internal control over fi nancialreporting that arise due to the Securities and Exchange Commission’s implementation ofthe Sarbanes-Oxley Act of 2002. What information must be included in management’s report on internal control over fi nancialreporting in the annual report fi led with the Securities and Exchange Commission? Describe the difference between a signifi cant defi ciency and a material weakness in internalcontrol. Comment on the accuracy of the following statement: “Since both signifi cant defi ciencies andmaterial weaknesses must be reported to the audit committee, for practical purposes, there isno distinction between the two.” What is meant by the “as of ” date when reporting on internal control over fi nancial reporting? What is a compensating control? Provide examples of…arrow_forward
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