Chapter 5: Internal controls Flashcards
1
Q
What are the 5 components of an internal controls system?
A
1) Control environment
2) Risk assessment
3) Information systems
4) Control activities
5) Monitoring
2
Q
What is a control environment?
A
Governance and management function and attitudes towards internal controls and its importance in the entity.
3
Q
What is the risk assessment process?
A
A process for identifying and analysing risks to acheiving the entities objectives.
4
Q
What is an information system?
A
Transactions posted via a system.
5
Q
What are the 2 types of control activities?
A
Preventive controls
Detective controls
6
Q
What are some examples of controls?
A
- Authorisation/ approval
- Reconciliations
- Verifications
- Physical or logical controls
- Segregation of duties
