Corporate Governance Flashcards
1
Q
What are the three categories of organizational objectives?
A
Effectiveness and efficiency of operations
Reliability of financial reporting
Compliance with applicable laws and regulations
2
Q
Components of Internal Control
A
- Control environment
- Risk assessment
- Control activities
- Information and communication
- Monitoring
3
Q
Elements of the Control Environment
A
- Human resource policies and practices
- Integrity and ethical values
- Organizational structure
- Commitment to competence
- Management’s philosophy and operating style
- Board of directors or audit committee
- Assignment of authority and responsibility
4
Q
What is governance?
A
The combination of people, policies, procedures, and processes that help ensure that an entity effectively and efficiently directs its activities toward meeting the objectives of its stakeholders.
5
Q
COSO Risk Management Framework
Four Categories of Objectives Applicable to All Entities:
A
- Strategic objectives
- Operations objectives
- Reporting objectives
- Compliance objectives
6
Q
The Risk Management Process
A
- Identify risks
- Assess risks
- Prioritize risks
- Formulate risk responses
- Monitor risk responses
“I Ate Pie For Money”
7
Q
Components of ERM
A
- Internal environment
- Objective setting
- Event identification
- Risk assessment
- Risk response
- Control activities
- Information and communication
- Monitoring
“I Overlooked Evidence Regarding Respiratory Controls In Medicine”
8
Q
ERM Limitations
A
- Faulty judgment
- Cost-benefit analysis
- Simple errors or mistakes
- Collusion
- Management override of ERM decisions
9
Q
What are the four aspects of corporate governance?
A
- Trusteeship
- Empowerment and control
- Good corporate citizenship
- Transparency of public disclosures
