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ELEC 1 > QUIZ 1 > Flashcards

QUIZ 1 Flashcards

1
Q

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

A

Financial Controllership

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2
Q

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.

A

Concepts of Controllership

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3
Q

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

A

Controllership as reactively supplying information

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4
Q

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

A

Controllership as planning and monitoring

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5
Q

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

A

Controllership as coordination function

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6
Q

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

A

Controllership as assuring the rationality of management

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7
Q

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

A

Production Process

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8
Q

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

A

Manufacturing cost standards and objectives for operations

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9
Q

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

A

Revenue Analysis Method

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10
Q

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

A

Budgeting processes and objective

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11
Q

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

A

Communication Process

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12
Q

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

A

Planning

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13
Q

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

A

Organizing

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14
Q

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

A

Directing

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15
Q

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

A

Measuring

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16
Q

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

A

Financial Analysis

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17
Q

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

A

Process Analysis

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18
Q

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.

A

Auditing

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19
Q

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

A

Budgeting

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20
Q

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.

A

Control Systems

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21
Q

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

A

Cost Accounting

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22
Q

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.

A

Financial Analysis

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23
Q

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.

A

Financial Statement

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24
Q

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.

A

Process Analysis

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25
Q

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.

A

Fixed assets

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26
Q

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.

A

Policies and Procedures

27
Q

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.

A

Record Keeping

28
Q

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

A

Tax Preparation

29
Q

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.

A

Transaction Processing

30
Q

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

A

Analysis of Information

31
Q

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

A

Communication Ability

32
Q

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.

A

Company and industry knowledge

33
Q

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

A

Management Skill

34
Q

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

A

Provision of the timely and cost-effective services

35
Q

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

A

Technical Knowledge

36
Q

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

A

Ethics

37
Q

What are the Controllership functions?

A
  1. Planning
  2. Organizing
  3. Directing
  4. Measuring
  5. Financial Analysis
  6. Process Analysis
38
Q

What are the primary responsibilities of a controller?

A
  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
39
Q

What are the types of internal control?

A
  1. Accounting Controls
  2. Administrative Controls
  3. Primary Controls
40
Q

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.

A

Accounting Controls

41
Q

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.

A

Administrative Controls

42
Q

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.

A

Primary Controls

43
Q

What are the elements of internal control structure?

A
  1. Control Environment
  2. Accounting System
44
Q

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

A

Control Environment

45
Q

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.

A

Accounting System

46
Q
  • correct billings are produced for shipped products or services rendered.
  • customer credit is checked prior to approving orders, and customer returns are approved.
A

Sales control objectives

47
Q

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

A

Production or service control objectives

48
Q
  • 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.
A

Finance Control Objectives

49
Q
  • office equipment is purchased only with proper authorization.
  • vacations are taken only with authorization.
  • hiring occurs only after proper authorization.
A

Administration control objectives

50
Q

What are the associates of control systems?

A
  1. Authorization
  2. Recording
  3. Safeguarding
  4. Reconciliation
  5. Valuation
51
Q

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.

A

Authorization

52
Q

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

A

Recording

53
Q

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

A

Safeguarding

54
Q

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

A

Reconciliation

55
Q

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.

A

Valuation

56
Q

What are the levels of controls

A
  1. Strategic board of directors and top management
  2. Tactical Board of directors and senior management
  3. Operational
57
Q

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

A

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

58
Q

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

A

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

59
Q

What does operational planning and control involves?

A

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

60
Q

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.

A

Fraud

61
Q

What are the types of fraud?

A

• 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

62
Q

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:

A

Management override

63
Q

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

A

• 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.

64
Q

What are the concepts of Controllership?

A
  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

ELEC 1 (2 decks)

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