5 - Objectives and Internal Controls Flashcards
two types of mgmt objectives?
- integrity of info (AFS reliable)
- operational obj (running smoothly)
what do we look at for integrity of info?
validity
accuracy
completeness
when is info valid?
if the underlying transaction is genuine (has actually occurred) and is in terms of mgmt policy
when is info accurate?
if inputs and calc is correct and recorded in correct account
when is info complete?
when all info is recorded, in the correct period, in a timely manner
types of operational objectives
- safeguarding of assets
- preventing fraud
- continuity
- compliance
- confidentiality
- economy, efficiency, effectiveness of ops
business continuity?
ensuring operations and core business functions are not severely impacted by a disaster / unplanned incident
economy, efficiency, effectiveness of ops?
economy = ensure bus is profitable effectiveness = achieve goals efficiency = achieve goals using least amt of resources
confidentiality of info?
protecting it from unauthorized access/use
preventing fraud?
protecting business from wrongful deception intended to result in a fin/personal gain
two types of risk?
- integrity of info risk
- operational risk
two components of business risk?
- negative objective
- risk factor
components of internal control?
- control environment
- risk assessment process
- information systems
- control activities
- monitoring of controls
control activities?
- procedures and policies designed to ensure mgmt obj are met
- form part of org’s IS
monitoring of controls?
- ensures effectiveness and ID weaknesses to address and minimize
- has to be done regularly as things are always changing, new risks arise, ctrls become outdated
