Internal Control Flashcards

1
Q

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

A

Internal Control

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

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

A

Effectiveness, Efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

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

A

directed, monitored, and measured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

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

A

detects, fraud, physical, and intangible

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Importance of Internal Control

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Name all the Control Principles

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

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

A

Separation of Duties

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

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

A

Process Integration

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

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

A

Management Support

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

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

A

Responsibility

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

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.

A

Conscientious Application

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

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

A

Systems Knowledge

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

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

A

Error Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

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

A

Staffing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

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

A

Outlier Analysis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Name the Characteristics of an Effective Internal Control System

A

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

17
Q

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

A

Organization Plan

18
Q

Organization Plan must be __ and __.

A

simple, flexible

19
Q

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

A

Organization Plan

20
Q

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

A

outline the functions

21
Q

Structural independence of an organization means __

A

Segregation of functions

22
Q

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

A

Control of access to assets

23
Q

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

A

Authorization system and procedure

24
Q

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

A

Methods for processing data