Responsibilities
Who in the organization is responsible for internal controls?
Answer: Everyone
Explanation: Everyone is responsible for their role within internal controls, even though it might look different based on their position within the organization.
Source: Barden, J. (n.d.). The who, what, how and why of Internal Controls. Naveen Jindal School of Management Business School. Retrieved April 2, 2023, from https://jindal.utdallas.edu/blog/who-what-how-why-internal-controls/#content1
Which component of the framework "is the foundation for all other components of internal control, providing discipline and structure".
Answer: Control Environment
Explanation: The control environment is established through the behavior and attitudes of management to employees.
Source: COSO model - internal controls. Marquette University. (n.d.). Retrieved April 2, 2023, from https://www.marquette.edu/riskunit/internalaudit/coso_model.shtml
"_______ is a process, affected by an entity's board of directors (trustees), management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories."
Answer: Internal controls
Explanation: This definition by COSO gives a good description of who is involved in internal controls and a base level why.
Source: What are Internal Controls - Internal Auditing - Western Illinois University. (n.d.). Retrieved April 2, 2023, from http://www.wiu.edu/internal_auditing/internal_controls/
True or False: Someone who displays all of the components of "PRO" could be committing fraud within an organization.
Answer: True
Explanation: P-Pressure R-Rationalization O-Opportunity; These are all components that may make someone feel like they can commit fraud.
Source: Barden, J. (n.d.). The who, what, how and why of Internal Controls. Naveen Jindal School of Management Business School. Retrieved April 2, 2023, from https://jindal.utdallas.edu/blog/who-what-how-why-internal-controls/#content1
True or false: Information systems produce reports, containing operational, financial and compliance related information, that are not important in running a business.
Answer: False
Explanation: Information systems help employees to know what is expected of them and how they can accomplish goals which is important in running a business.
Source: COSO model - internal controls. Marquette University. (n.d.). Retrieved April 2, 2023, from https://www.marquette.edu/riskunit/internalaudit/coso_model.shtml
True or false: "Internal controls provides for safeguarding of assets and proper recording of transactions."
Answer: True
Explanation: Internal controls put policies and procedures in place that protect the individual and the organization.
Source: Jckirwan@ufl.edu. (2022, February 4). Internal controls. Office of Internal Audit. Retrieved April 2, 2023, from http://www.oia.ufl.edu/home/information-and-resources/internal-controls/
Who is responsible for carrying out the internal control activities set forth by management?
Answer: Staff and operating personnel
Explanation: When things are put in place by management it is the expectation and procedure for staff to carry them out.
Source: Internal controls. Internal Controls | Financial Reporting. (n.d.). Retrieved April 2, 2023, from https://finance.uw.edu/fr/internal-controls
Which component includes activities that "provide a “reasonable” level of assurance that the unit’s goals and objectives will be accomplished".
Answer: Control Activities
Explanation: Control activities help to reduce risks and carry out company wide policies and procedures.
Source: Jckirwan@ufl.edu. (2022, February 4). Internal controls. Office of Internal Audit. Retrieved April 2, 2023, from http://www.oia.ufl.edu/home/information-and-resources/internal-controls/
True or false: Strong internal controls do not eliminate the possibility of fraud.
Answer: False
Explanation: Strong internal controls split duties and have safeguards in place that lesson the opportunities for a person to commit fraud.
Source: Barden, J. (n.d.). The who, what, how and why of Internal Controls. Naveen Jindal School of Management Business School. Retrieved April 2, 2023, from https://jindal.utdallas.edu/blog/who-what-how-why-internal-controls/#content1
True or False: "Management is responsible for communicating the expectations and duties of staff."
Answer: True
Explanation: Management has the role of communicating the different components of internal controls to their employees.
Source: Internal controls. Internal Controls | Financial Reporting. (n.d.). Retrieved April 2, 2023, from https://finance.uw.edu/fr/internal-controls
"_______ensures that the internal control system is operating as expected."
Answer: Monitoring
Explanation: This helps to determine if things within the system are going according to plan.
Source: Jckirwan@ufl.edu. (2022, February 4). Internal controls. Office of Internal Audit. Retrieved April 2, 2023, from http://www.oia.ufl.edu/home/information-and-resources/internal-controls/
"______ is when work duties are divided or segregated among different people to reduce the risk of error or inappropriate actions."
Answer: Segregation of duties
Explanation: This is an important example of how organizations can prevent fraud through internal controls.
Source:
What are Internal Controls? What are Internal Controls? - Internal Auditing - Western Illinois University. (n.d.). Retrieved April 2, 2023, from http://www.wiu.edu/internal_auditing/internal_controls/
True or false: Only managers are involved with the internal control system, which can enhance the mission, strategy, customer service and profits.
Answer: False
Explanation: Everyone within the organization is involved with the internal controls and these components.
Source: Barden, J. (n.d.). The who, what, how and why of Internal Controls. Naveen Jindal School of Management Business School. Retrieved April 2, 2023, from https://jindal.utdallas.edu/blog/who-what-how-why-internal-controls/#content1
Daily double!
True or false: Risk Assessment "is the identification and analysis of relevant risks to achievement of the objectives, forming a basis for determining how the risks should be managed".
Answer: True
Explanation: Risk assessments help protect assets and private information so it is important to identify and manage them accordingly.
Source: COSO model - internal controls. Marquette University. (n.d.). Retrieved April 2, 2023, from https://www.marquette.edu/riskunit/internalaudit/coso_model.shtml
What is the acronym for Committee of Sponsoring Organizations of the Treadway Commission
1. CSO
2. COSO
3. CSOTC
Answer: COSO
Explanation: The COSO framework was founded in 1985 as a way for companies to implement internal controls.
Source: About the COSO framework. About the COSO Framework | Cornell University Division of Financial Affairs. (n.d.). Retrieved April 2, 2023, from https://www.dfa.cornell.edu/controller/internalcontrols/cosoframework