CORPORATE GOVERNANCE

Question 1

Fiduciary Relationship

Answer 1

A fiduciary relationship is a legal or ethical relationship of trust between two people, organizations, or other such parties.

Question 2

The procedures for a well-defined change control process would include the following:

Answer 2

• The change control board approves the change and assigns a project manager.
• The project manager makes sure all paperwork has been received and approved.
• The project manager sets up schedules for all personnel involved.
• The projects are completed.
• Changes are tested and approved before release.

Question 3

Enterprise Risk Management

Answer 3

Enterprise risk management (ERM) is the process used by organizations to manage risk and seize opportunities to achieve the goals of the organization. It provides a framework for risk management, determines response strategy, and monitors the progress.

Question 4

Who is the person ultimately responsible for enterprise risk management within a company?

Answer 4

CEO

Question 5

Human resources policies and procedures should include the following:

Answer 5

• Hire employees based on the written job requirements
• Verify resumes and perform background checks
• Promote on both merit and performance
• Train members of the organization on many aspects

Question 6

Internal control consists of the following five interrelated components:

Answer 6

• Control environment sets the tone of an organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control, providing discipline and structure.
• Risk assessment is the entity’s identification and analysis of relevant risks to achievement of its objectives, forming a basis for determining how the risks should be managed.
• Information and communication are the identification, capture, and exchange of information in a form and time frame that enable people to carry out their responsibilities.
• Monitoring activities is a process that assesses the quality of internal control performance over time.
• Existing Control activities are the policies and procedures that help ensure that management directives are carried out.

Question 7

What does a integrated test facility allow?

Answer 7

Allows an auditor to introduce test data (simulated files) into an actual processing run to test the processing of that data. This provides evidence about operating effectiveness of the software.

Question 8

Expected Value

Answer 8

Is the sum of the outcomes (payoff) of each event multiplied by the probability of each event occurring. It combines the likelihood of each outcome with the payoff of that outcome, and so is a way of prioritizing alternatives while considering risk.