17 Principles of Internal Controls

Question 1

Define inbound communications.

Answer 1

Communications outsiders to the organization, including customers, suppliers, external auditors, regulators, financial analysts and others.

Question 2

Define risk assessment materiality.

Answer 2

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

Question 3

Define organizational policies.

Answer 3

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

Question 4

Define risk assessment precision.

Answer 4

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

Question 5

Define accountability in the context of designing internal control.

Answer 5

Holding individuals accountable for their internal control responsibilities.

Question 6

Define competence in the context of designing internal control.

Answer 6

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