Types of Internal Controls?
This type of internal control is used to stop errors or fraud before they happen.
What are preventive controls?
These groups hold primary responsibility for designing, implementing, and maintaining internal controls.
What are top managers and the board of directors?
This acronym stands for the organization that created the widely used model for internal control systems.
What are the Committee of Sponsoring Organizations?
This internal control step involves identifying possible threats to company processes or goals.
What are risk assessment procedures?
These are two steps experts often list as the foundation for any company’s internal control system.
What are setting policies and training employees?
These controls are designed to catch problems after they’ve already occurred.
What are detective controls?
These individuals play a supporting role by following internal control policies in their daily work.
What are employees?
This is the number of key components that make up the COSO internal control framework.
What are the five components of the COSO framework?
Companies assess risk mainly to prevent this.
What are mistakes, fraud, or loss?
This is one way external reviewers or auditors can tell that a company’s internal controls are working.
What are consistent procedures and accurate records?
This type of control includes activities like fixing entries or fixing broken processes.
What are corrective controls?
This is what leaders do when they follow company rules and expect others to do the same.
What is setting the tone at the top?
These are the five named elements that make up the COSO internal control framework
What are control environment, risk assessment, control activities, information and communication, and monitoring?
This is how companies should check for new risks.
What are regular risk reviews?
This ensures that policies, updates, and expectations are understood at every level of the company.
What is clear internal communication?
Segregation of duties and required approvals are examples of this type of control.
What are preventive controls?
True or False: Internal controls are more effective when company leadership actively supports and follows them.
This COSO component refers to the ethical tone and culture set by leadership.
What are the values defined by the control environment?
These common issues can hurt a business if not caught early. (Name at least one)
What are theft, fraud, or data breaches?
According to best practices in academic and government sources, this is the company’s responsibility when a control isn’t working.
What is correcting or replacing weak controls?
This type of control helps verify that internal controls are working as planned through audits or ongoing checks.
What are monitoring controls?
When no one is held responsible for internal controls, this can occur, weakening trust and increasing the chance of fraud or compliance issues.
What are control breakdowns?
This COSO component involves ongoing review to ensure that internal controls are functioning as intended.
What are monitoring activities?
This is what can happen when companies ignore known risks.
What are financial losses or damaged reputation?
Companies should do this to make sure their internal controls still work as risks, technology, or regulations evolve.
What is regularly update and test their internal controls?