Topic 8: Internal Controls I

Question 1

Control Activities

Answer 1

The actions established through policies and procedures that help ensure management’s directives to mitigate risks to the achievement of objectives are carried out.

Question 2

Control Environment

Answer 2

Comprises the integrity and ethical values of the organisation, including management operating style, delegation of authority systems and the processes for managing people.

Question 3

Corporate Governance

Answer 3

The way companies are managed to create value, enforce accountability and control, and manage risks.

Question 4

Internal Control

Answer 4

A process effected by an entity’s board of directors, management and other personnel designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting and compliance.

Question 5

Monitoring

Answer 5

Ongoing monitoring activities designed to detect internal control deficiencies so that action can be taken to ensure continuous improvement of the system.

Question 6

Risk Assessment

Answer 6

Involves a dynamic and iterative process for identifying and assessing the risks to the achievement of organisational objectives.