Internal Control MCQs 2026

Internal control is best described as

1. Aonly external audit procedures✓
2. Bonly product advertising✓
3. Conly union negotiations✓
4. Dprocess designed to provide reasonable assurance regarding objectives✓

Which statement about Segregation of duties is correct

1. Aone person handles all cash and records✓
2. Bseparating authorization recording and custody functions✓
3. CCEO signs all cheques and posts entries alone✓
4. Dwarehouse and ledger same person always✓

Physical controls is best described as

1. Asafeguarding assets through locks access and counts✓
2. Bopen unrestricted warehouse✓
3. Cno access logs✓
4. Dunlimited petty cash without limits✓

In Internal Control, Authorization controls primarily means

1. Amanagement approval before transactions are executed✓
2. Bany employee signs contracts✓
3. Cno approval for payments✓
4. Dautomatic unlimited spending✓

Internal Control: IT general controls can be defined as

1. Ashared passwords for all users✓
2. Bcontrols over access change management and operations in IT✓
3. Cno backup procedures✓
4. Dunrestricted program changes in production✓

Regarding Application controls in Internal Control, the accurate view is

1. Aautomated or manual controls within business applications✓
2. Bonly building maintenance✓
3. Conly fleet fuel logs✓
4. Donly canteen inventory✓

A key aspect of Control environment is that it involves

1. Aonly physical security locks✓
2. Bonly backup tapes✓
3. Conly invoice numbering✓
4. Dtone at top including integrity and ethical values✓

Regarding Control activities in Internal Control, the accurate view is

1. Apolicies and procedures ensuring management directives are carried out✓
2. Bmission statement only✓
3. Clogo design guidelines✓
4. Doffice colour scheme✓

Internal Control: Reconciliation controls can be defined as

1. Anever compare bank to books✓
2. Bignore differences permanently✓
3. Ccomparing records to identify and correct differences✓
4. Donly annual reconciliation of petty cash✓

Detective controls is best described as

1. Ablock transaction before entry✓
2. Bprevent duplicate invoice before payment✓
3. Cdesigned to identify errors or fraud after occurrence✓
4. Dstop unauthorized access at login only always✓

In Internal Control, Compensating controls primarily means

1. Aeliminate all controls in small entities✓
2. Bignore control gaps✓
3. Cduplicate same weakness✓
4. Dalternative controls when primary segregation not feasible✓

A key aspect of Control deficiency is that it involves

1. Aeffective control always✓
2. Bdesign or operation that does not allow prevention or detection timely✓
3. Cimmaterial typo in memo✓
4. Dstrong control environment only✓

Internal Control: Significant deficiency can be defined as

1. Atrivial formatting issue✓
2. Bimportant enough to merit attention of those charged with governance✓
3. Ccorrected before year-end always immaterial✓
4. Dno impact possible✓

Walkthrough test in the context of Internal Control refers to

1. Aonly reading policy manual without testing✓
2. Bonly analytical review at year-end✓
3. Ctracing transaction through system to understand control design✓
4. Donly inquiry without tracing✓

Which statement about Tests of operating effectiveness is correct

1. Aonly design assessment without operation✓
2. Bprocedures verifying controls operated throughout period✓
3. Conly one transaction always sufficient for all✓
4. Dignore deviations✓

Monitoring activities is best described as

1. Anever review controls✓
2. Bonly external marketing survey✓
3. Cignore deficiencies✓
4. Dongoing and separate evaluations of control effectiveness✓

Preventive controls is best described as

1. Adetect after loss only✓
2. Bdesigned to prevent errors or fraud before occurrence✓
3. Cinvestigate after year-end only✓
4. Dcorrect after audit report✓

Material weakness in the context of Internal Control refers to

1. Aminor delay in filing stationery requisition✓
2. Bcosmetic report formatting✓
3. Cdeficiency or combination such that material misstatement may not be prevented or detected✓
4. Doptional training delay✓

Risk assessment component in the context of Internal Control refers to

1. Aentity identification and analysis of risks to achievement of objectives✓
2. Bignoring all business risks✓
3. Conly counting inventory✓
4. Donly payroll calculation✓

Information and communication is best described as

1. Aonly social media posts✓
2. Bsystem capturing and communicating financial reporting information✓
3. Conly cafeteria feedback✓
4. Donly sports news✓