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16 Cards in this Set
- Front
- Back
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ERM Framework: Internal Environment |
The company culture that influences how organizations establish strategies and objectives, structure business activities, and identify, assess, and respond to risk. |
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ERM Framework: Objective Setting |
2nd ERM component that management determines what the company hopes to achieve as the corporate vision or mission. |
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ERM Framework: Event Identification |
An incident or occurrence emanating from internal or external sources that affects implementation of strategy or achievement of objectives. |
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ERM Framework: Risk Assessment |
To align identified risks with the company's tolerance for risk by likelihood, positive and negative impacts, individually and by category, their effect on other organizational units, and on an inherent and a residual basis. |
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ERM Framework: Risk Response |
Management can respond to risk by reduce, accept, share, and avoid risk. |
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ERM Framework: Control Activities |
Policies and procedures that provide reasonable assurance that control objectives are met and risk responses are carried out. |
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ERM Framework: Information & Communication |
Relates directly to the primary purpose of an AIS, which is to gather, record, process, store, summarize, and communicate information about an organization. |
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ERM Framework: Monitoring |
Perform ERM evaluations, implement effective supervision, use responsibility accounting systems, and monitor system activities. |
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Revenue Cycle: Sales Order Entry |
Threats: - Incomplete/inaccurate orders - Invalid orders
Controls: - Restriction of access to master data - Digital signatures or written signatures |
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Revenue Cycle: Shipping |
Threats: - Picking the wrong items or the wrong quantity - Theft of inventory
Controls: - Bar code and RFID technology - Restriction of physical access to inventory |
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Revenue Cycle: Billing |
Threats: - Failure to bill - Billing Error
Controls: - Separation of billing and shipping functions - Configuration of system to automatically enter pricing data |
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Revenue Cycle: Cash Collection |
Threats: - Theft of cash - Cash flow problems
Controls: - Separation of cash handling function from AR and credit functions - Cash flow budget |
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Expenditure Cycle: Ordering |
Threats: - Inaccurate inventory records - Purchasing items not needed
Controls: - Bar coding or RFID tags - Review and approval of purchases requisitions
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Expenditure Cycle: Receiving |
Threats: - Mistakes in counting - Verifying receipt of services
Controls: - Require receiving employees to sign receiving report - Audits |
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Expenditure Cycle: Approving Supplier Invoices |
Threats: - Errors in supplier invoices - Mistakes in posting to AP
Controls: - Verification of invoice accuracy - Reconciliation of detailed AP records with the general ledger control account
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Expenditure Cycle: Cash Disbursements |
Threats: - Failure to take advantage of discounts for prompt payment. - Paying for items not received.
Controls: - Filing of invoices by due date for discounts. - Requiring that all supplier invoices be matched to supporting documents that are acknowledged by both receiving and inventory control. |
