Accounting short answered questions

Accounting short answered questions

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Accounting short answered questions

What does it mean to create a culture of honesty, openness and assistance? Give an example from an organization with which you have been affiliated.

The creation of a culture of honesty, openness and assistance means that the employees and all the organization’s stakeholders should be encouraged by an organization in order to act in a manner that is open when they are translating the organization’s business. The employees also receive the encouragement to develop an assistance attitude towards all the employees. The employees are encouraged also to cultivate an acting culture in all truth even when the managers aren’t around.

Code of conduct and conflict of interest forms are often called” soft” controls. What does it mean?

Codes of conducts simply refer to some value collections and the regulations prescribe the organization’s employees. The codes of conduct usually manipulate the employees to behaving in a particular manner. The codes of conducts are expected to be adhered to by the employees otherwise they are not there to force employees in doing things. Therefore this means that the employees are controlled by the codes of conduct. Conflict of interests acts in a manner to stipulating the employees expected behaviors when the organizational business (Khan & Amann, 2013). This means that the conflict of interest forms control the organization.

What does it mean to have a good system of internal controls? Give some examples of internal controls

A good system of internal control refers to the systems that are put in use and also adopted in an organization which are directed to reduce the risk levels in an organization. This system therefore means the systems that the organizations have usually reduce the risk levels in the organization. For example the protecting cash and check collections, discouraging related party transactions, controls that is preventive and detective controls (Newton, 2005).

Whistleblower policies and procedures? Good or bad idea? Why?

These are guidelines that guide whistle blowers in an organization who wants to show any kind of activity which is viewed as not being ethical, illegal and if it is considered a very wrong act in the organization. The whistleblowers can be either external or internal. The policies of whistle blowing are a good idea. This is due to the fact that it highlights the activities that are illegal which are taking place in the organization. This will make the organization to put measures that can stop the progress of these activities.

Fraud symptoms can be separated into six groups:

Discuss three

  • Accounting anomalies
  • Internal control weakness
  • Analytical anomalies
  • Extravagant lifestyle
  • Unusual behavior
  • Tips and complaints

Accounting anomalies

These are the practices of accounting which are not according to the accounting principles that are laid down. These are not the practices of accounting which cannot be established through the following of the principles of accounting.

Internal control weakness

These refer to the weakness of the internal organization’s control system. The weaknesses are as the result of the failure of these systems in detecting and preventing the risks in the internal control measures.

Extravagant lifestyle

It is a fraud symptom in which the organizations funds custodian uses the funds recklessly on activities and issues that are not necessary. The management may make use of the cash in the organization to gather for their personal lifestyles other than making use of the funds to advance the operations of the organization (Hartman, & Werhane, 2009).

Discuss the elements of a good fraud report

The elements include the tombstone information which is involving the first information about the fraud. The details of allegations in which it examines the information’s origin. The other element includes the involved parties in the fraud. The next one is the fraud’s scope. Then the other report is the interview report, and finally the evidence of the fraud.

What does “tone at the tope” mean?

These are mostly put in use by the management. It refers to a term that is mostly used in describing the leadership of the management and commitment towards honesty, integrity, openness and behavior that is ethical.

Discuss the relative oversight responsibility of the audit committee, management, internal audit and independent auditors as it pertains to fraud

The audit committee usually reviews accounting that is significant and also other reporting issues. They have also an oversight responsibility over regulatory pronouncements to get an understanding of potential impact on the financial statement (Rossouw & Van, 2010).

The audit committee will put into consideration internal controls that should be put in position. They are also given the responsibility to review the effectiveness of these internal controls.

Summarize the five steps of managing business risk of fraud

Examples of how technology is used to prevent fraud

  • Identify the risk of the business
  • Analyze consequences
  • Evaluating the potential impact
  • Risk treatment
  • Monitoring and reviewing all the identified risks
  • Define and explain ERM
    • ERM stands for Enterprise Risk Management. The term describes a process, effected by a board of directors’ entity, management and other personnel that the organization usally applies during the setting of its strategies and designed to identify potential events that might interfere with the organization functions. The ERM framework gives direction and guidance on how to implement the risk management of the enterprise.
    • What is a risk assessment? What are the steps to compete one?
    • These refer to the process in which a risk manager identifies the hazards that are to befall on the organization, analysis of the risks which are associated with the hazards were identified and then coming up with appropriate ways to control the hazard.
    • Risk assessment steps
    • Identify hazards
    • Decide who might be harmed and how
    • Evaluation for the risk and decision on precautions
    • Recording your findings that are significant
    • Review the assessment

Technology helps organization in preventing fraud in a lot of ways. It improves the analysis of the data. This enables the business to be firm in digging deeper to the data and hence preventing fraud. It also enables more data analysis that is sophisticated for example predictive model and visualization. Therefore the management can level out all the anomalies (Parboteeah & Cullen, 2013).

Explain FCPA and the UK Bribery Act. Why all the fuss?

UK Bribery Act is an act which was passed by the parliament of the UK so as to address better requirements of the 1997 OECD anti bribery convention.

The FCPA of 1977 refer to a federal law of the United States as two of its main provisions and one that has to address accounting transparency requirements under the Acts of the securities exchange 1934and foreign officials bribery.

The differences between this two laws is that the UK Bribery act has a wide scope as it encompasses all the activities that are commercial while the FCPA has its restriction to the foreign public officials bribing.


Hartman, L. P., & Werhane, P. H. (2009). The global corporation: Sustainable, effective andethical practices : a case book. New York: Routledge.

Khan, S., & Amann, W. (2013). World humanism: Cross-cultural perspectives on ethicalpractices in organizations.

Newton, L. H. (2005). Business ethics and the natural environment. Malden, MA: Blackwell.

Parboteeah, P., & Cullen, J. B. (2013). Business ethics. New York, NY: Routledge.

Rossouw, D., & Van, V. L. (2010). Business ethics. Cape Town, Republic of South Africa:Oxford University Press.

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