As a Form of Internal Control to Address the Risk

question 5

Multiple Choice

As a form of internal control to address the risk of inappropriate/missing authorizations, internal audit review of selected transactions is best described as:

• A)A general control.
• B)An application control.
• C)A behavioral control.
• D)A financial control.

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Definitions:

Bank Statement Adjustment

The process of amending the balance in a company's record of its bank account to match the balance reported on the bank statement, often involving adding or subtracting items like checks or bank charges.

Outstanding Checks

Checks that have been issued and recorded in an entity's accounting system but have not yet been cashed or cleared by the bank.

Bank Statement Adjustment

The process of modifying the balance shown in a bank statement to match the adjusted balance in the ledger accounts, usually due to timing differences in recording transactions.

Company Books Adjustment

The process of making changes to the financial records to correct errors or update accounting information.