1-Corporate Governance and Operations Management Flashcards
CRIME
Control Environment Risk Assessment Information and Communication Monitoring Existing Controls
ORC
Framework Objectives®
There are three categories of objectives within the framework.
1. Operations Objectives
Operations objectives relate to the effectiveness and efficiency of an entity’s operations. This category includes financial and operational performance goals as well as ensuring that the assets of the organization are adequately safeguarded against potential losses.
- Reporting Objectives
Reporting objectives pertain to the reliability. timeliness. and transparency of an entity’s external and internal financial and non-financial reporting as established by regulators, accounting standard setters, or the firm’s internal policies. - Compliance Objectives
Compliance objectives are established to ensure the entity is adherin9 to all applicable laws and regulations.
CRIME
C=Control
EBOCA
a. Commitment to(Ethics) and Integrity
There is a commitment to ethical values and overall integrity throughout the
organization .
b. (Board independence) and Oversight
The board is independent from management and oversees the development and
performance of internal control.
c. (Organizational Structure
Management establishes an organizational structure, including reporting lines,
authorities, and responsibilities, that is appropriate to the organization’s objectives.
d. (commitment to Competence)
There is a commitment to hire. develop. and retain competent employees.
e. (Accountability)
Individuals are held accountable for their internal control responsibilities.
CRIME
R = Risk
a. Specify Objectives
The organization creates objectives that allow for identification and assessment of the risks related to those objectives.
b. ( Identify and Analyze Risks)
The organization identifies risks across the entity and analyzes risks in order to determine how the risks should be managed.
c. (consider Potential for Fraud)
The organization considers the potential for fraud in assessing risks.
d. Identify and Assess Changes
The organization identifies and assesses changes that could significantly impact the system of internal control.
CRIME
I = Information and Communications
Obtain and Use Information
The organization obtains or generates and uses relevant, high-quality information to
support the functioning of internal control.
Internally communicates information
necessary to support the functioning of internal controls, including relevant objectives and responsibilities .
Communicate with(External Parties)The organization communicates with external parties regarding matters that affect the functioning of internal control.
CRIME
M=Monitoring
a. Ongoing and/or Separate Evaluations
The organization selects, develops, and performs ongoing and/or separate evaluations to ascertain whether the components of internal control are present and functioning .
b. Communication of Deficiencies -
The organization evaluates and communicates internal control deficiencies in a timely manner to parties responsible for taking corrective action.
CRIME
E=existing control activities
a. Select and Develop Control Activities
The organization selects and develops control activities that contribute to the mitigation of risks to acceptable levels.
b. Select and Develop Technology Controls 11 1”l11
The organization selects and develops general control activities over technology to support the achievement of objectives.
c. Deployment of Policies and Procedures
The organization deploys control activities through policies that establish what is expected and procedures that put policies into action.
ERM Components
IS EAR AIM
Internal environment Setting objectives Event identification Assessment of Risk Risk Response Control Activities Information and Communication Monitoring
Objectives
SORC
Strategic Objectives Related Objectives Operations Objectives Reporting Objectives Commpliance Objectives
Information
FACT
Appropriate Timely Current Accurate Accessible
Marketing Practices
- Transaction Marketing - Lowest price
Customers are attracted for the sake of a single sale - for example, a used car sold purely based on price. - Interaction-Based Relationship Marketing –
Customers are attracted for the purpose of a sale that serves as the basis for an ongoing relationship. For example, a new car sale emphasizes value with anticipation of repeat sales and ongoing service. - Database Marketing
Information is gathered on customers and the information from that database is used to segment customers into target markets for a more effective selling effort; for example, the sale of a specialty item such as vitamin supplements to - E-marketing
E-marketing is the use of the internet accomplish marketing functions. - Network Marketing
Network marketing, sometimes referred to as multilevel marketing, focuses on relationships and referrals to accomplish marketing functions.
PIE
Cost Objects
Product Cost
Income Determination
Efficiency
Prime Costs
- Direct Material
2. Direct Labor
Traditional Costing
Pass Key
When traditional costing is used, the application of overhead is accomplished in two steps:
Step 1: Calculated overhead rate= Budgeted overhead costs + Estimated cost driver
Step 2: Applied overhead =~cost driver x Overhead rate (from Step 1)
Cost Accumulation
Pass Key
Although the most commonly tested cost accumulation systems are job-order costing and process costing, there are many variations of cost accumulation systems that may appear on your examination:
• Operations costing uses components of both job-order costing and process costing.
• Backflush costing accounts for certain costs at the end of the process in circumstances where there is little need for in-process inventory valuation.
Life-cycle costing seeks to monitor costs throughout the product’s life cycle and expand on the traditional costing systems that focus only on the manufacturing phase of a product’s life.
