Internal Control Flashcards
1
Q
Three primary objectives of a system of internal control
A
Accurate & reliable financial reporting
Compliance with applicable laws and regulations
Efficient and effective operations
2
Q
5 components of internal control
A
control Environment Risk assessment Control activities Information and communication Monitoring
3
Q
Factors that make up the control environment, a component of internal control
A
CHOPPER -- Commitment to competence Human resource policies and practices Organizational structure Participation of those charged with governance Philosophy of management and mgt op style Ethical values and integrity Responsibility assignment
4
Q
Focus of Control Activities, a component of internal control
A
PIPS -- Performance reviews Information processing Physical controls Segregation of duties
5
Q
Segregation of duties, element of control activities
A
ARCC-S
--
Authorization of transactions
Recording (posting) of transactions
Custody of assets
Comparisons
-Segregation of duties
6
Q
Risk Assessment Procedures
A
Analytical Procedures
7
Q
Document understanding of Internal control by using:
A
FIND -- Flowchart Internal control questionnaire Narrative or Memorandum Decision table/tree
8
Q
Inherent Limintations
A
COCO -- Collusion Override by management Competence/Human Error Obsolescence (change in company size, change in technology, etc)
