Term
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Definition
| policies, plans, and procedures implemented by a firm to protect the assets of the organization. |
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Term
| What does internal controls do? |
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Definition
Protect assets
check accuracy and reliability of financial reports
Promote effectiveness and efficiency of operations
enourage compliance with applicable laws and regulations. |
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Term
What does the 1992 COSO mean?
Whats the proposed internal control model? |
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Definition
Committee of Sponsoring Organizations.
1. Control the Environment
2. Control Activities
3. Risk Assessment
4. Information & Communication
5. Monitoring Performance |
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Term
| What goes into controlling an Environment |
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Definition
1. Management should create clearly stated policies that explicitly describe honest and dishonest behaviors in the company.
2. Management Philosophy
3. Assign Authority and responsibility (through a written policy or manual.)
4. Organizational structure.
5. Have an audit committee
6. Sound personnel policies and practices. |
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Term
| What is the audit committee responsible for? |
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Definition
| Overseeing the internal control structure, its financial reporting process, and its compliance with related laws, regulations, standards. |
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Term
| What should a policies and procedures manual include? |
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Definition
1. Chart of accounts
2. description of types of source documents that individuals must use to record transactions
3. Descriptions of authority and responsibility that each individual is assigned. |
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Term
| What are example of control activities |
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Definition
1. Good audit trail
2. Separation of Duties
3. Physical Protection of Assets
4. Internal reviews of controls by Internal audit subsystem.
5. Timely performance reports |
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Term
| How do you control procedures for cash handling? |
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Definition
1. Insurance coverage for employees who handle cash
2. Do everything by check rather than cash
3. Deposit daily cash receipts intact at the bank. |
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Term
| What is an operational audit? |
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Definition
| Periodic reviews of each department (to evaluate the effectiveness and efficiency of operations) |
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