17 Principles of Internal Control

Question 1

Define risk assessment precision.

Answer 1

Whether, and the extent to which, risk can be quantified.

Question 2

Define accountability in the context of designing internal control.

Answer 2

Holding individuals accountable for their internal control responsibilities.

Question 3

Define competence in the context of designing internal control.

Answer 3

A commitment to attract, develop, and retain highly qualified individuals consistent with achieving organizational objectives.

Question 4

Define inbound communications.

Answer 4

Communication with outsiders of the organization.

Question 5

Define organizational policies.

Answer 5

The organization’s control activities that establish stakeholder expectations regarding conduct and operations.

Question 6

Define risk assessment materiality.

Answer 6

The determination of how large of a risk poses a threat to objectives.