Fraud & Mistakes
Internal controls help prevent this illegal act with money
Fraud
Controls that stop problems before they happen are called what?
Preventive controls
The framework used by businesses for internal controls is called what?
COSO
A cashier and recordkeeper should be different people. What is this called?
Separation of duties
What is risk?
The chance something could go wrong
When employees make mistakes internal controls help do what?
detect and correct errors
Controls that find problems after they happen are called what?
Detective controls
The part of COSO that sets the tone of the company is what?
Control Environment
Locking inventory in a warehouse is what type of protection?
Physical control
Why do companies assess risk?
To prevent losses and problems
This happens when one person has too much control over a process?
Increased risk of fraud
Fixing a mistake after it is found is what type of control?
Corrective control
Identifying risks falls under which COSO component?
Risk Assessment
Requiring passwords for systems is an example of what?
Access control
Internal controls help reduce what in a business?
Risk
What type of fraud involves employees stealing company money?
Embezzlement
Requiring two signatures on a check is an example of what?
Preventive control
Communication of important information falls under which component?
Information and Communication
A manager reviewing employee work is what type of control?
Monitoring
Companies must adjust controls when what changes?
Business environment or risks
Internal controls reduce opportunities for fraud by doing what?
Separating duties
Bank reconciliations are an example of what type of control?
Detective control
Checking if controls are working is which component?
Monitoring
A company updating policies regularly is doing what?
Maintaining internal controls
Who is ultimately responsible for maintaining controls?
Management