Chapter 2 - Internal Controls

Question 1

Internal controls provide a system of ____ and ___ over the records of the municipality

Answer 1

Checks and balances

Question 2

Give examples of internal controls

Answer 2

Appropriate segregation of duties

Approval process for posting transactions

Competent personnel employed to perform the job

Using passwords

Locking your office

Question 3

Examples of specific areas for internal control evaluation are:

Answer 3

Cash receipts
Checks
Vouchers
Fixed Assets
Petty Cash Funds
Payroll Checks/Terminated Employees

Question 4

Internal controls can generally be classified as either:

Answer 4

Preventive or Detective

Question 5

____ internal controls are designed to discourage errors, irregularities, or other undesired events before they occur

Answer 5

Preventive

Question 6

____ internal controls are those designed to identity errors or irregularities that have already occurred

Answer 6

Detective

Question 7

A good method of internal control is to make sure that all bank accounts are _____ on a monthly basis

Answer 7

Reconciled