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CEB > M1 > Flashcards

M1 Flashcards

1
Q

COSO Frame Work

A
  • started in 1992 by a private group
  • It offers guidance for the internal reporting
  • Summarizes the best practice
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2
Q

4 COSO guidance

A
  • Creating
  • Implementary
  • Using
  • Assessing (Reaction)
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3
Q

How many objectives does COSO have for internal control?

A

It has 3 objectives (ORC)

  • Operating
  • Reporting
  • Compliance
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4
Q

Operating Objective

A

Operations are efficient and effective

assets are been safeguarded

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5
Q

Reporting Objective

A

Reporting financial (reliable, timeless, transparency)

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6
Q

Compliance Objective

A

Compliance with laws & regulations

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7
Q

How many components does COSO have?

A

It has 5 components (CRIME pneumatic)

  • Control enviroment
  • Risk Assesment
  • Information & Communication
  • Monotoring activities
  • Existing control activities
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8
Q

Control environment component

A

Tone at the top ( Ethics)

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9
Q

Risk assessment component

A

See if the Finacial statement are been misleading

  • Operations are not been effective
  • Breaking law
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10
Q

Information and Communication

A

“FACT” is been informed

  • Fair
  • Accurate
  • Complete
  • Timely
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11
Q

Monitoring Component

A

The effectiveness of control and report deficient

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12
Q

Exiting Control & Activities Component

A

Policies/procedures to mitigate risk

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13
Q

How many principles does CRIME have?

A

It has 17 principles

  • E-B-O-C-A (5)
  • S-A-F-R (4)
  • O-I-E (3)
  • SO-D(2)
  • CA-T-P(3)
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14
Q

Pneumatic for Control Environment

A

E-B-O-C-A

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15
Q

E from E-B-O-C-A

A

Ethics-Code of conduct

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16
Q

B from E-B-O-C-A

A

Board Independence- Board must be independent, objective and be knowledgeable of the business

17
Q

O from E-B-O-C-A

A

Organization-Segregation of duties. Can’t be centralized or decentralized. (Flexible and tailor to the organization)

18
Q

C from E-B-O-C-A

A

Commitment to Competence- Commitment to hire, train, develope and retain competent employees

19
Q

A from E-B-O-C-A

A

Accountability-People are held responsible for their internal control responsibilities. (Performance measurement, rewards and evaluating)

20
Q

Pneumatic for the Risk Assesment component?

A

S-A-F-R

21
Q

S in S-A-F-R?

A

Specify objectives- organization allows for identification & assessment

22
Q

A in S-A-F-R?

A

Identify & assess change- Find changes in the environment, a leadership model that can affect risk. Good or Bad

23
Q

F in S-A-F-R?

A

Consider potential fraud- Considers the potential for fraud in assessing risk. ( ex: Incentives & pressure)

24
Q

R in S-A-F-R?

A

Identify and analyze risk- Company looks for risk and sees how to respond

25
Q

Pneumatic for Information & comunication component?

A

O-I-E

26
Q

O in O-I-E

A

Obtain & use information - Obtain/generate and use information for fuction of internal control

27
Q

I in O-I-E

A

Internal communication- Internal audit connunication among the organization.

28
Q

E in O-I-E

A

Communication with external parties. Communication with an accounting firm

29
Q

Pneumatic for Monitoring Activities?

A

SO-D

30
Q

SO in SO-D

A

Separate Evaluation and Ongoing- Confirm internal controls are present and functional. (frequency of testing depends on risk)

31
Q

D in SO-D

A

Communication of deficiencies- communicate internal control deficiencie and correct it.

32
Q

Pneumatic for Existing control activities?

A

CA-T-P

find existing policies & procedures to mitigate risk

33
Q

CA in CA-T-P

A

Select & develop control activities - help mitigate risk

34
Q

T in CA-T-P

A

Select & develop technology controls- obtain information to achieve our objectives

35
Q

P in CA-T-P

A

Policies and procedures

36
Q

Key components in M1

A

Not all 17 principles must be present
All 5 components must be present
GASS uses “significant deficiency” & “material weakness “
COSO uses major “deficiency”

CEB (1 decks)

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