9/30 Class

Question 1

controls

Answer 1

preventing problems

Question 2

exam

Answer 2

60 questions multiple choice then an essay question
study inclass discussions, then the book second and any powerpoints. remember the sox assignment?
404, 302, 906, whistleblower
PCAOB
requirements on auditors

Question 3

COSO

Answer 3

control environment - on the bottom, management, etc.
risk assessment - what can go wrong
control activities - mitigating the risk first segregation of duties, authorization(preventative), documentary controls(audit trail), safeguarding of assets, reconciliation and review of analysis, IT controls, Information communications(ERP system), monitoring(internal auditors)

Question 4

risks

Answer 4

economy, how is our image to the public, fraud, misleading investors, we must mitigate the risk

Question 5

risk tolerance level

Answer 5

we have to provide assurance for investors

Question 6

control environment

Answer 6

putting the right people in the right places, more aggressive CEOs are usually taking more risk

Question 7

Winston Churchhill

Answer 7

panic feeling before hand is better than after, due diligence is what will help us and seeing what can go wrong before it goes wrong

Question 8

four phases in risk assessment level

Answer 8

entity level - what do we want to achieve
detail/activity level - we have to see each segment and where things can go wrong, objectives follow GAAP
risks - what does the company want and what does our area want
what can go wrong - what will stop us from succeeding
controls - stops the fraud
check risks every years

Question 9

four phases in risk

Answer 9

entity level objectives, activity level objectives, risks, managing change
controls are why we are doing this. we change controls according to the risk

Question 10

objectives

Answer 10

entity - what the company is trying to accomplish, ex: videos, culture, etc.
activity level - what the activities are doing

Question 11

coso cube

Answer 11

operations, financial reporting, compliance(law and regulations)

Question 12

assertions

Answer 12

make assertions and put in good controls for it

Question 13

risk vs objective

Answer 13

what is our risk, how do we mitigate that risk?

Question 14

externally

Answer 14

we have to see the changes and risks that we are up against, if something is a push to commit fraud we have to account for that

Question 15

the board

Answer 15

needs to look at the sec comments on competitors to see what controls we should put in place

Question 16

new strategies

Answer 16

new risk

Question 17

risk of mistatements or excluding

Answer 17

people will sue you

Question 18

significance/assertions

Answer 18

1. what is the significance of the risk
2. likelihood
3. how do we manage the risk

Question 19

key

Answer 19

understanding your company to see what can happen and what should happen

Question 20

change

Answer 20

we have to account for change, risks will always change

Question 21

payroll process

Answer 21

separate authorization, recording, and process
initiation - hiring an employee
authorization - something that starts this
processing
recording
custody - giving power to individuals, custody of assets, ex: power to get assets
review/recon
duty