Test Your Knowledge - Internal Controls & Fraud Prevention

What is the primary purpose of internal controls in an organization?

To ensure the company's financial statements are accurate
To prevent theft and fraud
Both a and b

Which of the following is an example of preventive internal control?

Regular surprise audits
Proper segregation of duties
Reconciliation of accounts

Which is an example of detective control?

Employee background checks
Periodic reconciliations
Issuing company credit cards

What is the role of a company’s whistleblower program?

To report fraudulent activities anonymously
To investigate internal controls
To perform internal audits

Which of the following actions helps to reduce the risk of fraud?

Limited access to financial systems
Allowing employees to manage all aspects of accounting
Segregation of duties

What is fraud risk assessment?

Evaluating financial data for errors
Analyzing the potential risks of fraud in an organization
Determining employee bonuses

Which internal control is aimed at ensuring financial information is accurate and complete?

Preventive control
Detective control
Corrective control

Which of the following is an example of a corrective control?

Regular audits
Correcting accounting errors when discovered
Implementing a fraud hotline

What is the primary focus of an internal audit?

Assessing the effectiveness of internal controls
Detecting financial fraud
Managing employee performance

Which of the following is a common method for detecting fraud in an organization?

Surprise audits
Allowing employees to work independently
Maintaining fewer internal controls

Test Your Knowledge - You have 10 questions!