1 - Corporate Goverance (BEC)

Question 1

The Committee of Sponsoring Organizations (COSO) of the Treadway Commission developed a widely used framework of internal control designed to provide reasonable assurance for a firm’s objectives related to the following 3 things:

Answer 1

1 - Effectiveness and efficiency of operations
2 - Reliability of financial reporting
3 - Compliance with laws and regulations

Question 2

The process used by organizations to manage risk and seize opportunities to achieve the goals of the organization is:

Answer 2

Enterprise Risk Management

Question 3

What are the 5 interrelated components of internal control?

Answer 3

Control environment, Risk assessment, control activities, information and communication, and monitoring activities

Question 4

The three primary benefits of the Enterprise Risk Management model are:

Answer 4

Improved identification of risk, increased positive outcomes, and improved resource deployment

Question 5

The _________ __________ forms the foundation of a business, consisting of its people and the environment in which the entity operates.

Answer 5

Control environment

Question 6

The process of monitoring includes conducting ongoing and/or ___________ and _________.

Answer 6

ongoing and/or separate evaluations and evaluating and communicating deficiencies

Question 7

The primary purpose of monitoring internal control is to assess internal control ___________, verifying that the internal control system remains adequate to address changes in _______.

Answer 7

performance over time; risk

Question 8

Each member of the audit committee must be a ________ and must otherwise be ________

Answer 8

member of the board of directors, independent

Question 9

A top-down risk assessment (TDRA) is used to identify and assess the following three items:

Answer 9

1 - financial reporting items
2 - the risks related to financial reporting
3 - the internal control procedures meant to limit the identified risks