QUIZ 1

Question 1

Is a management function that
supervises an organization’s
accounting and financial
reporting.

-it is responsible for the
implementation and monitoring
of internal controls to ensure the
smooth operation of a business

Answer 1

Financial Controllership

Question 2

can
help identify and
understand what
options exist when
d e s i g n i n g
c o n t r o l l e r s h i p
activities.

Answer 2

Concepts of Controllership

Question 3

A concept of Controllership where..
• Gather
information
• Prepare it
• Review it

Answer 3

Controllership as reactively supplying information

Question 4

A concept of Controllership where..
• Importance of
achieving or
exceeding the
target
• Taking
corrective
actions

Answer 4

Controllership as planning and monitoring

Question 5

A concept of Controllership where..
• Aligning
individual
decisions with
a common
goal

Answer 5

Controllership as coordination function

Question 6

A concept of Controllership where..
• Includes
responsibility
for information,
planning,
monitoring,
and
coordination
tasks

Answer 6

Controllership as assuring the rationality of management

Question 7

This is an essential element of Controllership where it includes set of tools
needed to manage the
product component
cost, production cost
and revenue streams

Answer 7

Production Process

Question 8

This is an essential elements of Controllership where includes purchased
raw materials and
component parts

Answer 8

Manufacturing cost standards and objectives for operations

Question 9

It’s an essential elements of Controllership where it’s used to improve both
aggregate revenue
sources and per
unit revenue

Answer 9

Revenue Analysis Method

Question 10

It’s an essential elements of Controllership where tracking structure
costs, cost behaviors and
revenue streams

Answer 10

Budgeting processes and objective

Question 11

It’s an essential element of Controllership where communicate to
Internal and
external
stakeholders

Answer 11

Communication Process

Question 12

A Controllership function where..
- Who does the work?
- What work is to be done?
- Timing of work completion

Answer 12

Planning

Question 13

A Controllership function where it’s Obtaining and keeping services of
experienced and well-trained accounting
personnel

Answer 13

Organizing

Question 14

A Controllership function where Ensuring that all employees in the
department work together in an orderly
manner to achieve the controller’s plan

Answer 14

Directing

Question 15

A Controllership function where it measures the performance of all key
aspects of the department

Answer 15

Measuring

Question 16

A Controllership function where it’s responsible for review, interpretation, and
generation of recommendation related to
corporate financial performance

Answer 16

Financial Analysis

Question 17

A Controllership function where it’s responsible for periodically reviewing
and evaluating the performance of each
major process that is involved in the
completion of transactions with the dual
objective of maintaining tight financial
controls over processes

Answer 17

Process Analysis

Question 18

A primary responsibility of s controller where the preparation of work
papers for external
auditors and the
rendering of any
additional assistance
needed by them to
complete the annual
audit.

Answer 18

Auditing

Question 19

A primary responsibility of a controller where the coordination of the
annual budgeting
process, including
maintenance of the
company budget and
the transfer of final
budget information into
the financial statements

Answer 19

Budgeting

Question 20

A primary responsibility of a controller where the establishment of a
sufficiently broad set of
controls to give
management assurance
that transaction are
processed properly.

Answer 20

Control Systems

Question 21

A primary responsibility of a controller where the coordination of
periodic physical
inventory counts. The continual cost
review of products
currently under
development

Answer 21

Cost Accounting

Question 22

A primary responsibility of a controller where The periodic comparison of actual to budgeted results
and the communication of variances to management,
along with recommendations for improvement.
The continuing review of revenue and expense. trends
and the communication of adverse trend results to
management, along with recommendations for
improvement.

Answer 22

Financial Analysis

Question 23

A primary responsibility of a controller where the preparation of all
periodic financial
statements, as well as
their accompanying
footnotes.
The preparation of an
interpretative analysis of
the financial statements.

Answer 23

Financial Statement

Question 24

A primary responsibility of a controller where the periodic review of all
processes involving
financial analysis to see if
they can be completed
with better controls, lower
costs or greater speed.

Answer 24

Process Analysis

Question 25

A primary responsibility of a controller where the annual audit of this is to ensure that all recorded assets are present. The periodic recording of this in the financial records and their proper recording under the correct asset categories and depreciation methods. The periodic review of this to determine the existence of any impairment. The proper analysis of capital expenditure requests.

Answer 25

Fixed assets

Question 26

A primary responsibility of a controller where the creation and maintenance of all this is related to the control of company assets and the proper completion of financial transactions. The training of the department personnel in the use of accounting policies and procedures. The modification of existing policies and procedures to match the requirements of government regulations.

Answer 26

Policies and Procedures

Question 27

A primary responsibility of a controller where the proper indexing, storage, and retrieval of all accounting documents. The orderly planning for and scheduling of document destruction, in accordance with the corporate document retention policy.

Answer 27

Record Keeping

Question 28

A primary responsibility where the timely preparation and filing of tax returns, as well as the supervision of all matters relating to corporate taxation.

Answer 28

Tax Preparation

Question 29

A primary responsibility of a controller where the timely completion of all accounting transactions at intervals and in the manner specified in the accounting policies and procedures manual. The proper completion of all transactions authorized by the board of directors or in accordance with the terms of all authorized contracts. The proper approval of those transactions requires them, in accordance with company policy.

Answer 29

Transaction Processing

Question 30

A Job Qualification for controller where must be sufficiently comfortable with financial information to readily understand the meaning of a variety of ratios and trends and what they portend for a company

Answer 30

Analysis of Information

Question 31

A job qualification where key component of the controller’s function is compiling information and communicating it to management.

Answer 31

Communication Ability

Question 32

A job qualification where a controller must have a good knowledge of both company and industry operations to know how they impact the operations of the accounting department.

Answer 32

Company and industry knowledge

Question 33

A job qualification where you must have excellent knowledge of the planning, organizing, directing, and measurement functions needed to manage the accounting system

Answer 33

Management Skill

Question 34

A job qualification where you must run the accounting department as if it were a profit center.

Answer 34

Provision of the timely and cost-effective services

Question 35

A job qualification where a controller should be thoroughly versed in all generally accepted accounting principles (GAAP).

Answer 35

Technical Knowledge

Question 36

The controller is in the uniquely difficult position of having a significant impact on the level of ethics practiced throughout the company

Answer 36

Ethics

Question 37

What are the Controllership functions?

Answer 37

1. Planning 2. Organizing 3. Directing 4. Measuring 5. Financial Analysis 6. Process Analysis

Question 38

What are the primary responsibilities of a controller?

Answer 38

1. Auditing 2. Budgeting 3. Control Systems 4. Cost Accounting 5. Financial Analysis 6. Financial Statement 7. Process Analysis 8. Fixed Assets 9. Policies and Procedures 10. Record Keeping 11. Tax Preparation 12. Transaction Processing

Question 39

What are the types of internal control?

Answer 39

1. Accounting Controls 2. Administrative Controls 3. Primary Controls

Question 40

A type of internal control where a plan of organization and all methods and procedures that are concerned with the safeguarding of assets and the reliability of the financial records. systems of authorization and approval. separation of duties concerned with record-keeping and accounting reports from those concerned with operations or asset custody; physical controls over assets; and internal auditing.

Answer 40

Accounting Controls

Question 41

A type of internal control where a plan of organization and all methods and procedures that relate to operational efficiency and adherence to managerial policies and that usually are concerned only indirectly with the financial records. -time and motion studies performance reports employee training programs quality control.

Answer 41

Administrative Controls

Question 42

A type of internal control where it concerns the establishment of policy and basic guidelines by which an enterprise will be directed as a means of achieving the business objectives.

Answer 42

Primary Controls

Question 43

What are the elements of internal control structure?

Answer 43

1. Control Environment 2. Accounting System

Question 44

It is the corporate atmosphere in which the accounting (and other) controls exist and in which the financial statements are prepared It reflects the management's commitment to an effective system of internal control. It represents the collective effort of many factors, including: o Management philosophy and operating style • Organization structure • Functioning of board of directors and the board committees o Methods of assigning authority and responsibility • Management control methods • The existence and effectiveness of an internal and audit function o Personnel policies and procedures o Influence of external factors

Answer 44

Control Environment

Question 45

The proper direction of this is one of the principal responsibilities of the controller. An effective system of this encompasses those principles, methods, and procedures, as well as those records that will: • Identify properly and record all valid transactions • Describe the transactions on a timely basis and in sufficient detail to permit proper classification of transactions for financial reporting • Determine the time period in which the transactions occurred so as to permit recording in the proper accounting period o Measure the value of the transaction in a manner that permits recording of the proper monetary value in financial statements • Permit proper presentation of the transactions and related required disclosures in the financial statements. • Management must identify the principal activities, risks, and exposures in each operating component of the business and define the control objectives related to those activities. • Management must describe, and understand the various systems used to process transactions, safeguard assets, and prepare financial reports.

Answer 45

Accounting System

Question 46

- correct billings are produced for shipped products or services rendered. - customer credit is checked prior to approving orders, and customer returns are approved.

Answer 46

Sales control objectives

Question 47

minimal scrap occurs as products are created, the correct quantities of products are produced, and pilferage is kept minimum.

Answer 47

Production or service control objectives

Question 48

- cash receipts are deposited on the day of receipt. - petty cash is issued only with proper authorization. - bad debts are properly authorized before being removed from the receivables ledger.

Answer 48

Finance Control Objectives

Question 49

- office equipment is purchased only with proper authorization. - vacations are taken only with authorization. - hiring occurs only after proper authorization.

Answer 49

Administration control objectives

Question 50

What are the associates of control systems?

Answer 50

1. Authorization 2. Recording 3. Safeguarding 4. Reconciliation 5. Valuation

Question 51

This could be evidenced in a general way by establishing related policies, contract of this limits, investment limits, standard price lists, and so on. Or, in a given situation, a special type of this may be needed.

Answer 51

Authorization

Question 52

Transactions should be recorded in the proper account, at the proper time (proper cutoff), with the proper description.

Answer 52

Recording

Question 53

Physical assets should not be under the physical custody of those responsible for related record-keeping functions.

Answer 53

Safeguarding

Question 54

Periodic reconciliations of physical assets to records, or control accounts, should be made

Answer 54

Reconciliation

Question 55

Provision should be made for assurances that the assets are properly valued in accordance with generally accepted accounting principles - and that the adjustments are made.

Answer 55

Valuation

Question 56

What are the levels of controls

Answer 56

1. Strategic board of directors and top management 2. Tactical Board of directors and senior management 3. Operational

Question 57

Who strategic board of directors and top management plan to control?

Answer 57

• Organizational structure • Corporate goals and objectives • Long-range planning procedures • Marketing policy decision making • Management policy decision making • Financial policy decision making

Question 58

Who does tactical board of directors and senior management plan and control?

Answer 58

• Annual profit plans • Executive-personnel policies (inventories, replacement) • Capital expenditures

Question 59

What does operational planning and control involves?

Answer 59

• Credit approval practices • Treatment of uncollectible accounts • Billing procedure • Purchasing procedure • Salary and wage authorization • Pension plan performance

Question 60

It is an intentional financial misstatement or the misappropriation of funds. This is not an unintentional mistake, such as an incorrect accounting estimate, the application of a cost to an incorrect account, or a lost inventory tag during a physical count.

Answer 60

Fraud

Question 61

What are the types of fraud?

Answer 61

• Generate bills from nonexistent companies. • Pay personal bills. • Alter approved expense amounts. • Bids between purchases and suppliers. • Submit multiple expense receipts • Sell company assets. • Poor internal controls or poor internal control environment • Existence of heavy financial pressures on individuals •Other sources of pressure • Contributing conditions

Question 62

It occurs when executives with sufficient real or apparent authority cause subordinates to conceal or record transactions improperly, or cause documents to be processed outside of the established procedures. The following conditions might tempt managers to override controls:

Answer 62

Management override

Question 63

What are the conditions that might tempt managers to override controls?

Answer 63

• Management compensation is directly and substantialy affected by operating results, and those results tend to be erratic. • The management of the business unit is under extreme pressure to achieve specified earnings. • The operating unit is in an industry experiencing a large number of business failures. • The organization has been sold and the management will benefit from the price, which is related to operating results and financial condition.

Question 64

What are the concepts of Controllership?

Answer 64

1. Controllership as reactively supplying information 2. Controllership as planning and monitoring 3. Controllership as coordination function 4. Controllership as assuring the rationality of management