Financial Statements
Financial Statements
Financial Statements
Internal Controls
Internal Controls
100
Financial Statements and planning are considered the
What is Ultimate Scorecard"
100
This ratio is the best measure of profitability
What is Spread Analysis
100
This is important because it provides a cushion, rainy day fund or the company's 'hibernation fat'
What is Capital
100
Ultimately responsible that controls exist
What is the Board of Directors
100
Increase the reliability of financial reporting and decrease the risk of employee fraud and external fraud.
What can internal controls DO?
200
You can tell if your business model is working if you have enough ________, enough _________, and ___________.
What are Profit, Capital and Growth
200
Costs of Deposits (Cost of Funds) Operating Expenses and Provisions for Loan Losses
What are ways in which credit unions spend money
200
Other names for Capital
What are Net Worth, Equity, and Reserves
200
Responsible for ensuring proper controls exist and are being followed (internal audit and external audit)
What is the Supervisory Committee?
200
Ensure entities success, assist in improving management, and provide any kind of assurance to achieve management or board objectives
What can internal controls NOT do?
300
The problem with comparing your credit union financials to this group is that it does not reflect a business model
What is peer group?
300
Measures profitability and how it was attained. Also known as the Common Sizing Ratio
What is Spread Analysis
300
Capital is NOT
What is cash
300
Responsible to establish, monitor and follow the internal controls
What are the Management and staff?
300
A system of checks and balances that help prevent error or fraud or identify error or fraud quickly after it occurs.
What is the definition of internal controls
400
Graphing these in a 24 or 36 month rolling trend helps to identify patterns
What are Key Ratios?
400
In projecting the worst 3 years possible (when assets grow, there are financial losses, and have below 4% of this) it means you don't have enough
What is Capital
400
Rule of thumb # 2. Keep a Capital to Assets ratio above
What is 9%
400
Much more common than Fraud
What is Error
400
Balance internal controls with this. Slow enough to not tempt employees to steal.
What is Speed of Service
500
If this grows and Capital doesn't keep up the credit union becomes unstable
What is Assets
500
This measures the stability of the credit union
What is capital to assets ratio
500
You should have enough capital to get you through ____________.
What is 3 bad years
500
Only being able to do one or two out of these three processes 1) Taking a loan application 2) Underwriting the loan 3) Funding the Loan
What is Segregation of Duties
500
Because they have too few employees to have proper 'segregation of duties'
Why would smaller credit unions be likely to have fewer internal controls than larger ones?
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