Internal Controls Basics
What are internal controls designed to prevent?
What are fraud, errors, and inefficiencies?
Who is responsible for implementing and overseeing internal controls?
Who is management?
What does COSO stand for?
What is the Committee of Sponsoring Organizations?
What process identifies potential risks that could impact business objectives?
What is risk assessment?
What law was passed in response to the Enron scandal?
What is the Sarbanes-Oxley Act (SOX)?
Internal controls ensure accuracy and reliability in what type of reports?
What are financial reports?
What group ensures internal controls align with the organization's goals?
What is the Board of Directors?
Name one of the five components of the COSO Internal Control Model.
What is control environment, risk assessment, control activities, information & communication, or monitoring?
What is an example of a control activity to prevent fraud?
What is requiring multiple approvals for large transactions?
What does SOX require companies to do?
What is strengthen internal controls and increase financial transparency?
Name one key benefit of having strong internal controls.
What is protecting assets, ensuring compliance, or improving efficiency?
Who evaluates the effectiveness of internal controls through audits?
Who are internal and external auditors?
Which component sets the ethical tone of the organization?
What is the control environment?
What type of fraud occurs when employees manipulate financial statements?
What is accounting fraud?
What is the role of external auditors under SOX?
What is to provide independent reviews of financial statements?
Which major corporate scandal in the early 2000s highlighted the need for stronger internal controls?
What is Enron?
What is the role of employees in internal controls?
What is following policies and reporting control issues?
Risk assessment evaluates two key factors. Name one.
What is likelihood or severity?
If a company processes online transactions, what major risk should they assess?
What is cybersecurity risk?
Which COSO component is directly related to ongoing audits and evaluations?
What is monitoring activities?
Internal controls help organizations achieve three main objectives. Name one.
What is operations, reporting, or compliance?
Which two groups provide oversight and assurance for internal controls?
What are the Board of Directors and auditors?
Which COSO component ensures employees receive clear financial and operational information?
What is information & communication?
Name a tool companies use to prevent online fraud.
What is two-factor authentication?
What are two major consequences of weak internal controls?
What are financial loss and legal penalties?