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PART C: ACCOUNTING AND REPORTING SYSTEMS, CONTROLS AND COMPLIANCE 
 
266
 
 
1
B, C The internal control system comprises the control environment and control procedures 
2
(a) (i) (c) (ii) 
(b) (iii) 
3 
A 
mandated 
control is required by law and imposed by external authorities. 
4
A system audit 
An efficiency audit 

A management audit 

A value for money audit 

5
False. Internal auditors should be alert to fraud as part of risk management. 
6
B 
An audit trail shows who has accessed a system and the operations performed. 
7
False. It is ad clicker that directs the victim's computer to a bogus website by encouraging them to click 
on a specific link contained in online advertising. Pharming has a similar effect, but involves 
automatically redirecting a visitor from an organisation’s legitimate website to a bogus website. 
8
B 
Automation takes over the routine processing of transactions so that accountants can focus their 
attention on value-adding activities such as producing and analysing reports. Distributed ledger 
technology reduces the need to verify ownership of assets and enables the valuation of assets to 
be trusted.
 
 
 
Now try ... 
Attempt the questions below from the 
Practice Question Bank 
Q43 
Q44 
Q45 
Q46 
Q47 
Q48 
ANSWERS TO QUICK QUIZ 
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267 
C H A P T E R 
TOPIC LIST 
SYLLABUS 
REFERENCE 
1 What is fraud? 
C7(a)
2 Potential 
for 
fraud 
C7(b)
3 Implications of fraud for the organisation 
C7(c)
4 Systems for detecting and preventing fraud 
C7(d)
5 Responsibility for detecting and preventing fraud 
C7(d)
6 Money 
laundering 
C7(e)-(h)
Identifying and 
preventing fraud
This chapter considers the various types of fraud that an 
organisation may be prone to (