Acctg, Exam 2-Ch 7

Front 1

COSO

Back 1

committee of sponsoring organizations of the treadway commission, studies issues regarding internal control

Front 2

five mgmt assertions

Back 2

assertions about: existence or occurrence, completeness, allowance or valuation, rights and obligations, presentation and disclosure
ECARP

Front 3

assertions-existence or occurrence

Back 3

statements that items on the balance sheet really existed on the balance sheet date and that transactions reported in the income statement in fact took place during the year (fin stmt users)

Front 4

assertions-completeness

Back 4

deal with the issue of whether all accounts and all transactions have been properly accounted for (investors)

Front 5

assertions-allowance or valuation

Back 5

pertain to the measurement of the financial statement elements, correct quantity and price to properly including items and summing correctly

Front 6

assertions-rights and obligations

Back 6

deal with the issue of whether the assets are really the rights of the company and whether the debts are really its obligations

Front 7

assertions-presentation and disclosure

Back 7

assertions that everything that needs to be disclosed and explained to the investment community has been disclosed and explained in the report

Front 8

internal control system

Back 8

set of policies and procedurs that collectively provide a reasonable assurnace that the entity accomplishes its goals of effective and efficient operations, reliable financial reports, and compliance with laws and regulations

Front 9

five components of internal control system

Back 9

CCRIM
control environment, control activities, risk assessment, information and communication, monitoring

Front 10

control environment

Back 10

comprises the actions and behaviors that indicate how manangers and directors feel about control issues, demonstrates the overall attitude toward ethics

Front 11

three structural elements of control environment

Back 11

board of directors, audit committee, internal auditors

Front 12

risk assessment

Back 12

deals with the identification and analysis and the quantification of the risks that managers face

Front 13

control activities

Back 13

policies and procedures implemented by managers to assure that specific goals are met (procedures carry out policies)

Front 14

information and communication

Back 14

information sent to managers and directors to help assess the firm's current position and what needs done to reach the firm's goal

Front 15

monitoring

Back 15

continual assessment of the system's performance

Front 16

control objectives

Back 16

safeguard the assets of the entity, engage only in those transactions authorized by mgmt, record all transactions completely and accurately, safeguard the acctg records
SERS

Front 17

control activities

Back 17

maintenance of adequate acctg records, assignment of authority and responsibility, limited access to assets, independent verifications, segregation of duties, authorization of transactions
MALISA

Front 18

assignment of authority and responsibility

Back 18

match authority and responsibility

Front 19

authorization of transactions

Back 19

the firm should engage in no transaction unless it has been authorized by mgmt (approval)

Front 20

maintenance of adequate acctg records

Back 20

trustworthy data captured by the appropriate documents and records
acctg records-input and output documents, journals, ledgers

Front 21

limited access to assets

Back 21

allow access to certain assets only to those individuals who have the authority to obtain access(inventory, cash, pp&e)

Front 22

independent verification

Back 22

procedures that check up on individuals and the TPS (reconciliation)

Front 23

segregation of duties

Back 23

segregate functions that if combined, might cause difficulties with achieving the objectives of the internal control system

Front 24

common audit procedures for cash

Back 24

surprise visits to petty cash fund, comparing cancelled checks with cd journal, examine cancelled checks, compare bank deposit tickets with the cr journal, bank reconciliations