BEC Q7 Flashcards
What is the most effective means of transmitting a message of ethical behavior
Demonstrating the behavior
This is tone at the top
This is what leadership should be doing
What does specifying competence levels for every job provide?
pecifying competence levels for every job provides assurance that management’s directives are less likely to be violated due to error
What does strengthening internal audit’s ability to deter and report improper behavior do?
It enhances the effectiveness of internal control and facilitates the reporting of improper behavior
What does removing the pressure to meet unrealistic goals accomplish
It reduces one of the reasons fraud may be committed
When applying ERM how to you prioritize risks
The are prioritized in terms of their likelihood of occurrence and expected impact on the company
So expected value - this is considered important because it is compared to the expected values of risks associated with alternative decisions in order to determine risk priority
According to COSO what are the three categories of objectives
1 - operations objectives - maintaining price variances within published guidelines or maintaining adequate staffing to keep overtime expense within budget
2 - reporting objectives - to maintain accounting principle s according to GAAP
3 - compliance objectives - adherence to laws and regulations
What does an effective FRMP do
- It CANT eliminate fraud but it can minimize frames loss
- It initiate a visible and rigorous fraud governance process
- It entails a thorough periodic fraud risk assessment
- It response quickly to fraud allegations
What attribute of a management report has the greatest impact on managements ability to make effective decisions
Relevence - it implies information is accurate, timely, and useful for decisions making purposes
What is exception orientation with management reporting
Thi sis when you report unusual items -
It is not as useful in decision making as relevance
What is summarization in management reporting
This is when you present aggregate data or information
What is concise reporting
This is generally desirable, but may not have the greatest impact on management decision making - relevence is
What are the stated goals of Dodd Frank
Enhancing the financial stability of the US
Protecting Tax Payers by ending bail outs - no more too big to fail
Protecting consumers form abusive financial services practices
Improve the financial accountability and transparency of the financial system
When you are designing controls what should you do
- Should be designed properly and as process changes so should their design
- They should not remain static
- They should be responsive to changes in their environment
To be a certified financial expert on an audit committee what experience do you need
understand GAAP, financial statements, and internal accounting controls
What is change control
- This ensures that alterations to the system are performed in a coordinated and controlled manner
Its violated when someone is able to implement changes without monitoring or testing
