1.

The control procedure of comparing a voucher package to vendor invoices is designed to

reduce the risk of
a. failure to take advantage of discounts for prompt payment
b. mistakes in posting to accounts payable
c. paying for items not received(Pg. 427)
d. theft of inventory
e. making duplicate payments

2. Which of the following statements are true?

a. Issuing employees procurement cards is an example of the control procedure referred
to as “general authorization.”
b. Organizations can reduce the risk of fraudulent disbursements by sending their bank a
list of all checks issued, a process referred to as “Positive Pay.”
c. Both of the statements above are true.
d. None of the statements above are true.

3. The control procedure of prohibiting employees from accepting gifts is designed to re- duce
the risk of
a. theft of inventory
b. kickbacks(Pg. 426)
c. fraudulent cash disbursements
d. stockouts
e. none of the above

4. The control procedure of cancelling the documents in a voucher package is designed to reduce
the risk of
a. making duplicate payments(Pg. 427)
b. paying for items not received
c. fraudulent cash disbursements
d. failure to take advantage of discounts for prompt payment e. theft of inventory
5. Which of the following control procedures is designed to reduce the risk of check altera- tion
fraud?
a. ACH blocks on accounts not used for payments
b. Use of dedicated computer and browser for online banking
c. Establishing “Positive Pay” arrangements with banks(Pg.427)
d. Access controls for EFT terminals
e. Prenumbering all checks

6. Which of the following control procedures is designed to reduce the risk of theft of inventory?
a. Restriction of physical access to inventory
b. Periodic physical counts of inventory and reconciliation to recorded quantities on
hand
c. Documentation of all transfers of inventory between employees
d. All of the above(Pg. 426)
e. None of the above

7. Which of the following control procedures is designed to reduce the risk of ordering un-
needed inventory?
a. Tracking and monitoring product quality by supplier
b. Purchasing only from approved suppliers
c. Holding purchasing managers responsible for rework and scrap costs
d. All of the above
e. None of the above

8. Which of the following documents is no longer needed if a company uses the evaluated
receipts system (ERS) with its suppliers?
a. Purchase order
b. Receiving report
c. Supplier invoice
d. Debit memo
e. None of the above
9. Kickbacks are a problem because they increase the risk of
a. purchasing inventory that is not needed
b. purchasing inferior quality items
c. purchasing at inflated prices
d. all of the above
e. none of the above

10. Which threat is most likely to result in the largest losses in a short period of time?
a. Alteration of checks or EFT payments
b. Theft of inventory
c. Duplicate payments to suppliers
d. All of the above
e. None of the above