17 Principles of Internal Control

Question 1

Control Environment - 5 Principles

Answer 1

1) Organization demonstrates a commitment to integrity and ethical values
2) Board of directors demonstrates independence of management, and oversees the development and monitoring of internal control
3) Management establishes structures, reporting lines and appropriate authorities and responsibilities to achieve objectives
4) Competence - Organization demonstrates commitment to achieving organizational objectives
5) Accountability

Question 2

Risk Assessment - 4 Principles

Answer 2

1) Objectives
2) Assessment
3) Fraud
4) Change management - Organization identifies and assesses changes in the external environment; assessing changes in the business model

Question 3

Control Activities - 3 Principles

Answer 3

1) Risk reduction
2) Technology controls
3) Policies

Question 4

Information and Communication - 3 Principles

Answer 4

1) Quality - relevant high quality information supports internal control processes
2) Internal - internal communication supports control processes
3) External - communication with outsiders supports internal control processes

Question 5

Monitoring Activities - 2 Principles

Answer 5

1) Ongoing and periodic

2) Address deficiencies