Question

match the following terms with their definitions. (use each definition only once.)
term

1. internal control
2. control procedures
3. firewalls
4. encryption
5. environment
6. information system
7. separation of duties
8. collusion
9. documents
10. audits
11. operational efficiency
12. risk assessment
13. sarbanes - oxley act

definition
a. two or more people working together to overcome internal controls
b. part of internal control that ensures resources are not wasted
c. requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports
d. should be prenumbered to prevent theft and inefficiency
e. limits access to a local network.
f. example: the person who opens the bank statement should not also be the person who is reconciling cash.
g. identification of uncertainties that may arise due to a companys products, services or operations.
h. examination of a companys financial statements and accounting system by a trained accounting professional.
i. without a sufficient one of these, information cannot properly be gathered and summarized.
j. the organizational plan and all related measures that safeguard assets, encourage employees to follow company policies, promote operational efficiency, and

Explanation:

1. Internal control: The organizational plan and all related measures that safeguard assets, encourage employees to follow company policies, promote operational efficiency, etc. - j
2. Control procedures: Part of internal control that ensures resources are not wasted - b
3. Firewalls: Limits access to a local network - e
4. Encryption: Not directly matched in given defs but conceptually related to security; no exact match here
5. Environment: General context for business operations; no exact match here
6. Information system: Without a sufficient one of these, information cannot properly be gathered and summarized - i
7. Separation of duties: Example: The person who opens the bank statement should not also be the person who is reconciling cash - f
8. Collusion: Two or more people working together to overcome internal controls - a
9. Documents: Should be prenumbered to prevent theft and inefficiency - d
10. Audits: Examination of a company’s financial statements and accounting system by a trained accounting professional - h
11. Operational efficiency: Not directly matched in given defs but related to overall performance; no exact match here
12. Risk assessment: Identification of uncertainties that may arise due to a company’s products, services or operations - g
13. Sarbanes - Oxley Act: Requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports - c

Answer:

1. Internal control - j
2. Control procedures - b
3. Firewalls - e
4. Encryption - No exact match
5. Environment - No exact match
6. Information system - i
7. Separation of duties - f
8. Collusion - a
9. Documents - d
10. Audits - h
11. Operational efficiency - No exact match
12. Risk assessment - g
13. Sarbanes - Oxley Act - c