A3 - Internal Control Flashcards
1
Q
What are the five components of the COSO framework for internal control?
A
CRIME Control environment Risk assessment Information and communication systems Monitoring Existing control activities
2
Q
What are the control activites that will assure a strong system of internal control?
A
PAID TIPS Prenumbered documents Authorized transactions Independent checks Documentation Timely/appropriate performance reviews Information processing controls Physical controls Segregation of duties
3
Q
What are the three elements of segregation of duties?
A
ARC
Authorization
Record keeping
Custody
4
Q
T/F: The cost-benefit relationship is a primary criterion that should be considered in designing internal control
A
True
5
Q
What is the ultimate purpose of assessing control risk?
A
To contribute to the auditor’s evaluation of the risk that material misstatements may exist in the financial statements
6
Q
T/F: The more information technology used in an audit, the less extensive the documentation will be
A
False
