Category 1: Internal Controls Basics
The process designed to provide reasonable assurance that objectives are achieved
What are internal controls?
The group is primarily responsible for internal controls
Who is management?
The framework used for internal controls
What is COSO?
Policies and procedures that help carry out directives
What are control activities?
The possibility of loss or error
What is risk?
The main purpose of internal controls
What is to prevent fraud and errors?
This group provides oversight of internal controls
Who is on the board of directors?
The number of COSO components
What is five?
Sharing important information within the company
What is information and communication?
Identifying risks helps prevent this
What is fraud?
Internal controls help ensure this type of reporting is accurate
What is financial reporting?
These individuals test and evaluate internal controls
Who are internal auditors?
The first COSO component focused on ethics and tone
What is a control environment?
Evaluating risks that affect objectives
What is risk assessment?
This type of control prevents errors before they occur
What is preventive control?
Internal controls improve this within an organization
What is the efficiency and effectiveness of operations
Everyone in the company shares this responsibility
What is maintaining internal controls?
The COSO component focused on identifying risks
What is risk assessment?
Management’s attitude toward control
What is control environment?
This control finds errors after they occur
What is detective control?
Internal controls also ensure compliance with these
What are laws and regulations?
This act requires companies to maintain strong internal controls
What is the Sarbanes-Oxley Act?
The COSO component focused on reviewing performance
What is monitoring?
Ongoing evaluations of internal controls
What is monitoring activities?
Risk assessment helps organizations achieve these
What are business objectives?