Internal Control Flashcards
1
Q
Who is responsible for internal controls?
A
Management
2
Q
Who provides oversight to ensure that internal controls are properly designed and operate effectively?
A
Board of Directors
3
Q
Control Activities
A
The policies and procedures that help ensure management directives are carried out
4
Q
5 Components of Internal Control
A
- Control Environment
- Risk Assessment
- Control Activities
- Information and Communication
- Monitoring
5
Q
Control Environment
A
Sets the tone of an organization, influencing the control consciousness of its people
6
Q
Which stakeholders have interest in internal controls?
A
- Owners
- Management
- Creditors
- Suppliers
7
Q
Sarbanes-Oxley Act applies to who?
A
Companies whose securities are traded on U.S. stock exchanges
8
Q
What is a process flow diagram?
A
Documents business process and highlights the internal controls present within those processes
9
Q
2 Components of Inherent Risk
A
- Likelihood of the risk occurring
- Severity or magnitude of the risk
10
Q
3 Components of the Fraud Triangle
A
- Pressures
- Opportunities
- Rationalization
