ch. 5
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11 terms
Terms | Definitions |
|---|---|
 define internal controls: | a process effected by an entity's board of directors, management, or other personal to provide reasonable assurance to the achievement of the following objectives; reliability of financial reporting, compliance with applicable laws and regulations, and effectiveness and efficiency of operations. |
| list the 5 components of COSO's integrated framework on internal control: | 1. risk assessment 2. control environment 3. control activities 5. information and communication 6. monitoring |
| the process used to identify and evaluate the risks that may effect an organization's ability to achieve its objectives | risk assessment |
| the overall control consciousness of the organization, effected by management through, example, policies, procedures, ethical standards, and monitoring processes | control environment |
| the policies and procedures implemented by managers to assure the accomplishment of organizational objectives and the mitigation of risks | control activities |
| the process of identifying, capturing, and exchanging information in a timely fashion to assist in the accomplishment of an organization's objectives | information and communication |
| assesses the quality of other internal components and whether they continue to operate effectively. (includes assessment of both the design and operation of controls on a timely basis) | monitoring |
| what usually involves a 2-way flow? explain: | information and communication; from top-management to the rest of the organization (key policies, code of conduct, and strategies) & from the bottom-up (communicating economic info as well as deviations from policies) |
| according to "segregation of duties" what transactional functions should be kept seperate? | authorizing, recording, and physical custody |
| what control procedures are often referred to as input, output, and processing? | application controls |
| what confirms the auditor's understanding of a firm's I/Cs | a walkthrough |
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