M1 Internal Control Frameworks Flashcards
MCQ-06751
The Treadway Commission was established to study factors that lead to fraudulent financial reporting. The Treadway Commission was established by:
Private sponsoring organizations.
MCQ-06752
The Committee on Sponsoring Organizations prepared the Internal Control Integrated Framework:
To help businesses assess internal control.
MCQ-07141
In a large public corporation, evaluating internal control procedures should be the responsibility of:
Internal audit staff who report to the board of directors.
MCQ-06492
A company that maintains a strong internal audit FUNCTION that reports directly to the Board of Directors is applying the ideas from which principle of effective internal control over
financial reporting?
Organizational STRUCTURE.
MCQ-08542
According to COSO, the proper tone at the top helps a company to do each of the following, EXCEPT:
Adhere to fiscal budgets and goals as outlined by the internal audit committee and board of directors.
MCQ-06758
Kamp Sporting Goods seeks to establish a code of conduct that will communicate the “tone at the top” to all employees. The contents of the code will likely include all of the following, except:
Definitions of common sense approaches to software piracy to ensure that the
company is competitive
MCQ-07015
Which of the following positions best describes the nature of the Board of Directors of XYZ Co.’s RELATIONSHIP to the company?
Fiduciary.
MCQ-06767
As a matter of policy, all correspondence to or from regulatory auditors received by the management of the Barclay Corporation is provided to the Barclay Corporation audit committee and the corporation’s full board as needed. In assessing entity wide controls, management might conclude:
The Board of Directors understands and exercises oversight responsibility related to financial reporting and related internal control.
MCQ-07141
In a large public corporation, evaluating internal control procedures should be the responsibility of:
Internal audit staff who report to the board of directors
In a large public corporation, evaluating internal control
procedures should be the responsibility of an organizationally independent internal
audit function that reports to the governing body of the corporation.
MCQ-06483
A company that retains a CPA with the appropriate KNOWLEDGE, skills, and abilities to
prepare timely and effective financial reporting is applying the ideas from which principle of
effective internal control over financial reporting
Commitment to COMPETENCE
The commitment to competence principle of the control
environment component of the Internal Control—Integrated Framework suggests
stronger controls and encourages the company to retain qualified personnel to handle
financial reporting.
MCQ-06748
The EXTERNAL auditors for the Horace Company assess the achievement of internal control
objectives each year and communicate the assessment to management and the board.
Communication by the external auditor illustrates which principle of the information and
communication component of the Committee of Sponsoring Organizations’ Integrated
Framework?
EXTERNAL Communication
The principle of external communications asserts that matters
affecting the achievement of financial reporting should be communicated with outside
parties.
MCQ-06751
The Treadway Commission was established to study factors that lead to fraudulent financial
reporting. The Treadway Commission was established by:
Private sponsoring organizations
MCQ-06752
The Committee on Sponsoring Organizations prepared the Internal Control Integrated
Framework:
To help businesses assess internal control.
MCQ-06492
A company that maintains a strong internal audit function that reports directly to the Board
of Directors is applying the ideas from which principle of effective internal control over
financial reporting?
Organizational structure.
MCQ-08542
According to COSO, the proper tone at the top helps a company to do each of the following,
except:
Adhere to fiscal budgets and goals as outlined by the internal audit committee
and board of directors.
MCQ-06758
Kamp Sporting Goods seeks to establish a code of conduct that will communicate the “tone
at the top” to all employees. The contents of the code will likely include all of the following,
except:
Definitions of common sense approaches to software piracy to ensure that the
company is competitive.
MCQ-07015
Which of the following positions best describes the nature of the Board of Directors of XYZ
Co.’s relationship to the company?
Fiduciary
MCQ-06767
As a matter of policy, all correspondence to or from regulatory auditors received by the
management of the Barclay Corporation is provided to the Barclay Corporation audit
committee and the corporation’s full board as needed. In assessing entity wide controls,
management might conclude:
The BOARD of Directors understands and exercises OVERSIGHT RESPONSIBILITY
related to financial reporting and related internal control.
MCQ-06768
Auburndale Corporation has a corporate compliance program that allows employees the
option of anonymously reporting violations of laws, rules, regulations, policies or other
issues of abuse through a hotline. Reported issues are reviewed by the internal auditor and
either immediately forwarded to the CEO or summarized and reported to the CEO each
month. The program also provides opportunities to report through supervisory channels and
includes a biannual training class that all employees must complete. The corporate
compliance program demonstrates that:
Sound INTEGRITY AND ETHICAL values are developed and understood and set the
standard of conduct for financial reporting.
MCQ-06769
The Carlton Corporation publishes an Employee Handbook that contains employee
responsibilities for moral behavior including a code of conduct. Each year, employees must
acknowledge their receipt of the handbook, their understanding of the code, and if they
have any awareness of non-compliance within the company. The policies would indicate:
Sound integrity and ethical values are developed and understood and set the
standard of conduct for financial reporting.
MCQ-11146
An issuer’s board of directors would ordinarily participate in each of the following activities,
EXCEPT:
Supervising and monitoring the quality-control testing upon the installation of a
new INFORMATION TECHNOLOGY system.
MCQ-14815
A company has established and communicated baseline EXPECTATIONS for performance to all
employees. The company’s action demonstrates a focus on which of the following
components of the COSO Internal Control framework?
Control ENVIRONMENT
The control environment component of the Internal Controlframework represents the processes, structures, and standards that provide the
foundation for the establishment of an entity’s internal control system. Baseline
expectations for employee performance are included in the accountability principle
within the control environment.
MCQ-05158
According to the COSO, a primary purpose of monitoring internal control is to verify that the
internal control system remains adequate to address changes in:
Risks
MCQ-04329
According to COSO, which of the following is included in the assess-and-report phase of an
effective approach to monitoring internal controls?
Prioritize FINDINGS
Findings occur as a result of monitoring internal controls. Once
those findings occur, they must be prioritized in order to help management and the
organization address the most critical issues associated with their internal controls.
