Integral parts of the operating procedures management uses to achieve its objectives and prevent undesirable results.
What are Internal Controls?
100
The organization’s tone; the foundation for all other components of internal control.
What is the Control Environment?
100
The Committee of Sponsoring Organizations
What does COSO stand for?
100
Anything that endangers the achievement of an objective.
What is Risk?
100
Examples of this include human error, fraud, system breakdowns and natural disasters.
What are risks?
200
Examples of these are separation of duties, proper authorization, adequate documentation, and physical control over assets.
What are Preventable Controls?
200
Policies and procedures that ensure management’s directives are carried out and help ensure that necessary actions are taken to minimize risks to achievement of the entity’s objectives.
What are Control Activities?
200
Effectiveness and efficiency of operations, Reliability of financial reporting and Compliance with applicable laws and regulations.
What are the three categories in COSO’s definition of internal controls?
200
The identification and analysis of risks associated with the achievement of operations, financial reporting, and compliance goals and objectives.
What is Risk Assessment?
200
Authorization,review and approval, Verification, Reconciliation, Physical security over assets, Segregation of duties, Education training and coaching, and Performance planning and evaluation.
What are commonly used internal controls?
300
Examples of these are reviews, analyses, variance analyses, reconciliations, physical inventories, and audits.
What are Detective Controls?
300
Management establishes activity-level objectives and mechanisms for identifying and analyzing risk related to their achievement.
What is a proponent of Risk Assessment?
300
Integrity, ethical values, and competence of an organization's people.
What does the Control Environment aspect encompass?
300
The reason why an unfavorable event may occur.
What is the Cause of Risk?
300
Identify and assess risks, evaluate and develop, if necessary, methods to minimize these risks; put int place policies and procedures; communicate information on control activities to the staff;monitor to ensure the effectiveness of their controls.
What are the steps management utilize when performing risk assessments?
400
Everyone, however ultimately management is responsible for identifying the risks that could prevent their employees from achieving their objectives.
Who is the responsible party for internal controls?
400
Assessing the quality of the system’s performance over time. This is accomplished through ongoing monitoring activities, separate evaluations or a combination of the two.
What is the Monitoring component of an Internal Control?
400
Treadway Committee
What is name of the Committee that puts out the report titled The Internal Control – Integrated Framework (COSO Report)
400
A measure of the magnitude of the effect on an organization if the unfavorable event were to occur. Inherent risk is innate to the program function or activity and is evaluated by the ultimate harm that may be done or the opportunity that may be lost.
What is Significance or Impact of Risk?
400
To achieve some purpose or goal
What is reason Organizations exist?
500
The Control Environment, Risk Management, Control Activities, Information and Communication and Monitoring.
What are the of five interrelated components of Internal Controls?
500
This must be identified, captured, and communicated in a form and time frame that enable people to carry out their responsibilities.
What is the Information and Communication Component?
500
A process, affected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives
What is the COSO definition of an internal control?
500
The probability that an unfavorable event would occur if there were no internal controls or limited internal controls.
What is the Likelihood of Risk?
500
To Ensure that resources are used in a manner consistent with laws, regulations, and policies;Minimize the likelihood of waste, fraud, or misuse of company resources; Obtain and maintain reliable financial and program data which is essential to sound internal management and to effectively meet external reporting requirements;Meet contractual and legal requirements; and Satisfy the public's expectations that the company is making every effort to adhere to sound, fundamental business practices.
What is an Organization’s duty when it comes to establishing and maintaining internal controls?