The Information System Component of Internal Control

question 92

Multiple Choice

The information system component of internal control:

• A) ensures that every system that processes accounting data should have the ability to capture transactions as they occur.
• B) monitors controls.
• C) offers hints of where fraud or errors could occur.
• D) ensures that the IT department has adequate control procedures in place to ensure that no one can hack into the company's database.

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Definitions:

Takeovers

The acquisition of one company by another, in which the acquiring company obtains a controlling interest in the target company.

Interest Income

Income earned from deposit accounts or from investing in interest-bearing financial instruments.

Purchasing Power

The worth of a currency depicted by how many goods or services can be purchased with one unit of it.

Deflation

A decrease in the general price level of goods and services, often associated with reduced demand or increased supply.