Week 2 Flashcards
Strategies
Operational approaches by which management intends to achieve its objectives
Internal control
A process installed by an entity to provide reasonable assurance regarding the achievement of:
- Effectiveness and efficiency of operations
- Reliability of financial reporting
- Compliance with applicable laws and regulations
- Safeguarding of assets against unauthorized aquisition, use or disposition
Effectiveness of design of internal controls
Whether the control is able to prevent, detect and correct material misstatements
Implementation of internal controls
Whether the control exists and is used
Application controls
Automated controls that initiate, record, process and report transactions rather than the computer system in general
IT general controls
Controls over the entity’s IT processes that support the continued proper operation of the IT environment
Competence
Knowledge and skills necessary to accomplish tasks that define the indivual’s job
Accounting system
Series of steps by which economic events are captured by the enterprise
Control activities
Policies and procedures that help ensure management directives are carried out
Segregation of duties
Seeks out to prevent persons with access to readily realizable assets from being able to adjust the records that record and thereby control these assets
Monitoring
Process that deals with ongoing assessment of the quality of internal control performance
Hard controls
Written rules, physical constraints and activities that are explicit and formal
Soft controls
Intangible factors in an organization that influence the behaviour of managers and employees
