Internal Control

Question 1

What is the accounting and auditing processes used in a company’s finance department that ensure the integrity of financial reporting and regulatory compliance?

Answer 1

Internal Control

Question 2

Internal Control is a process for assuring of an organization’s objectives in operational__ and __

Answer 2

Effectiveness, Efficiency

Question 3

Internal Control is a means by which an organization’s resources are __, __, & __

Answer 3

directed, monitored, and measured

Question 4

Internal Control __ and prevents __, protecting both __ and __ resources.

Answer 4

detects, fraud, physical, and intangible

Question 5

Importance of Internal Control

Answer 5

Help comply with Laws and Regulation
Prevent fraud
Improve operational efficiency
Keep asset losses from occurring
Maintain accurate accounting records
Reliable basis for sound decision-making

Question 6

Name all the Control Principles

Answer 6

Separation of Duties
Process Integration
Management Support
Responsibility
Conscientious Application
Systems Knowledge
Error Reporting
Staffing
Outlier Analysis

Question 7

Assigning different parts of a process to different people so collusion would be required for someone to commit fraud

Answer 7

Separation of Duties

Question 8

Controls should be thoroughly intertwined with business transactions that it is impossible for employees not to perform them as part of their daily activities.

Answer 8

Process Integration

Question 9

Management must make it clear to employees that it thoroughly supports the system of controls.

Answer 9

Management Support

Question 10

Someone should be assigned responsibility for every control, and that they receive updates on the status of those controls.

Answer 10

Responsibility

Question 11

Establish a culture that encourages the close examination of control breaches to determine what went wrong and how the system can be adjusted to reduce the risk that the same issue will occur again.

Answer 11

Conscientious Application

Question 12

Train employees to ensure that they thoroughly understand all aspects of the systems with which they are involved.

Answer 12

Systems Knowledge

Question 13

In order to know that a control is functioning properly install a system for reporting control breaches.

Answer 13

Error Reporting

Question 14

There must be an adequate number of employees on hand to operate controls.

Answer 14

Staffing

Question 15

Is a process that involves identifying the anomalous observation in the dataset.

Answer 15

Outlier Analysis

Question 16

Name the Characteristics of an Effective Internal Control System

Answer 16

Organization Plan
Segregation of functions
Control of access to assets
Authorization system and procedure
Methods for processing data

Question 17

It must be simple and flexible.Should clearly outline the functions of each unit and its staff members.

Answer 17

Organization Plan

Question 18

Organization Plan must be __ and __.

Answer 18

simple, flexible

Question 19

What defines the line of authority and responsibilities within the company:supervisors, technical leaders, managers, directors, etc.

Answer 19

Organization Plan

Question 20

Organizational plan should clearly __ __ __ of each unit and its staff members.

Answer 20

outline the functions

Question 21

Structural independence of an organization means __

Answer 21

Segregation of functions

Question 22

Involves restricting physicalor remote access to assets and the preparation of documents for authorizing access to assets, documents, and records.

Answer 22

Control of access to assets

Question 23

The procedures involved in an activity must include periodic audits and reviews, as well as obtaining control information.

Answer 23

Authorization system and procedure

Question 24

Maintenance of an adequate, complete and organized records management system.

Answer 24

Methods for processing data