Managements Fraud Related Responsiblitites Flashcards
Which of the following parties is ultimately responsible for the prevention and detection of fraud within an organization?
A. Internal auditors
B. Management
C. External auditors
D. Board of directors
B. Management
According to the Committee of Sponsoring Organizations of the Treadway Commission (COSO), internal control is a process “designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance.”
A. True
B. False
True
According to the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the control environment of an organization:
A. Is established by directors and senior management
B. Provides the foundation for the overall internal control system
C. Sets the moral and ethical tone of the organization
D. All of the above
D. All of the above
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) identified five interrelated components of _________________.
A. Ethical theories
B. Professional development
C. Internal control
D. Fraud
C. Internal control
Which of the following elements is required for a corporate compliance program to be effective?
A. Consistent punishment for employees who violate the program
B. Appropriate incentives for compliance with the program
C. Due diligence in the hiring process
D. All of the above
D. All of the above
Which of the following is one of the five interrelated components of a company’s internal control system, as laid out by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)?
A. Assurance function
B. Risk assessment
C. Ethical culture
D. Independent oversight
B. Risk assessment
In a public company, the chief executive officer (CEO) should be charged with having primary responsibility for the oversight of the company’s compliance program.
A. True
B. False
False
According to the Committee of Sponsoring Organizations of the Treadway Commission’s (COSO) internal control model, an organization should perform both ongoing evaluations and periodic, separate evaluations to ascertain whether the components of internal control are present and functioning.
A. True
B. False
True
Which of the following factors should an organization consider when designing the components of its compliance and ethics program?
A. Industry size and standards
B. Recurrence of similar conduct
C. Organization size
D. All of the above
D. All of the above
Which of the following is part of management’s responsibilities for the anti-fraud program?
A. Responding appropriately to instances of fraud
B. Setting the organization’s ethical tone
C. Ensuring the effectiveness of the program
D. All of the above
D. All of the above
According to the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the effectiveness of an overall system of internal controls can be determined by assessing whether several specific components are in place, functioning effectively, and operating together in an integrated manner.
A. True
B. False
True
An organization’s board of directors does NOT have to be knowledgeable about the implementation of an organization’s compliance and ethics program if the board has delegated that responsibility to a compliance officer.
A. True
B. False
False
According to the Committee of Sponsoring Organizations of the Treadway Commission (COSO), an internal control system should be designed to provide reasonable assurance regarding the achievement of the organization’s objectives concerning which of the following?
A. The reporting of financial and nonfinancial information to internal and external parties
B. The organization’s adherence to the laws and regulations to which it is subject
C. The effectiveness and efficiency of the organization’s operations
D. All of the above
D. All of the above
Which of the following is a principle concerning the information and communication component of the Committee of Sponsoring Organizations of the Treadway Commission’s (COSO) Internal Control—Integrated Framework (the Framework)?
A. The organization communicates with external parties regarding matters affecting the functioning of internal control
B. The organization obtains or generates and uses relevant, quality information to support the functioning of internal control
C. The organization internally communicates information—including objectives and responsibilities for internal control—necessary to support the functioning of internal control
D. All of the above
D. All of the above
Which of the following is NOT one of the principles involved in the risk assessment process, as laid out by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)?
A. Conducting ongoing monitoring of the risk management strategy
B. Setting clear organizational objectives
C. Assessing changes that could significantly impact the internal control system
D. Considering the potential for fraud
A. Conducting ongoing monitoring of the risk management strategy
