Internal Control

Question 0

Operations objectives (Orc) effectiveness and efficiency of an entity’s operations

Answer 0

effectiveness and efficiency of an entity’s operations

Question 1

Framework objective

Answer 1

Operations objectives, reporting objectives and compliance objectives

Question 2

Reporting objectives

Answer 2

Reliability, timeliness, and transparency

Question 3

Compliance objectives

Answer 3

To ensure the entity is adhering to all applicable laws and regulations

Question 4

Five components of internal control

Answer 4

Crime: control environment, risk assessment by managers, information and communication systems, monitoring, existing control activities

Question 5

Control environment

Answer 5

Tone at the top (ethics). Commitment to ethics and integrity, board independence and oversight, organizational structure, commitment to competence, accountability (eboca)

Question 6

Control environment

Answer 6

Eboca: ethics and integrity, board independence and oversight, organizational structure, commitment to competence, accountability

Question 7

Risk assessment

Answer 7

Event identification, assess risk, respond to risk

Question 8

Information and communication

Answer 8

Fact: fair, accurate, complete, timely

Question 9

Monitoring activities

Answer 9

Process of assessing the quality of internal control performance over time by assessing the design and operation of controls on a timely basis and taking the necessary correctives actions. Ongoing and or separate evaluations. Communication of deficiencies

Question 10

Existing control activities

Answer 10

To mitigate risk of misstatements. Detective or preventative. Segregation of duties, it controls, deployment and policies and procedures

Question 11

Erm

Answer 11

SORC: strategic: high level goals designed to achieve the mission. Operations: effective and efficient use of resources. Reporting: reliable and consistent reporting. Compliance: compliance with laws and regulations.

Question 12

Erm component acronym

Answer 12

Is ear aim

Question 13

Internal control in is ear aim

Answer 13

Internal environment is basically like c in the crime mnemonic, control environment (eboca) ethics and value and integrity, board oversight, organizational structure, commitment to competence, accountability. In addition HR, human resource standards and risk appetite

Question 14

Objecting setting (sorc)

Answer 14

Strategic objective: mission driven objectives of an organization are its strategic objectives
Operations objectives: efficiency and effectiveness and profitability goals that are subject to management discretion or style
Reporting: timely and accurate and both internal and external
Compliance: complying with all laws and regulations

Question 15

Event identification r in the crime mnemonics which is the risk appetite

Answer 15

Remember that r has three more mnemonic (ear)

Event identification: positive and negative events
Risk assessment: likelihood and severity
Risk response: risk must align with the organizations overall risk appetite

Question 16

Avoidance

Answer 16

Discontinue and terminate the risk

Question 17

Reduce the risk

Answer 17

Mitigate the risk through investing in better training

Question 18

Share risk

Answer 18

Buy insurance and transfer the risk

Question 19

Acceptance

Answer 19

No action since the risk is low and low loss. Low probability and severity