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18 Cards in this Set

  • Front
  • Back

Report to SEC

Then integrated report on the internal control as well over financial reporting

Controls relevant

Safeguard assets & produce accurate financial statements

Internal controls objectives

ACE


Accurate & reliable financial reporting


Compliance with laws & regulations


Effectiveness & efficiency of operations

5 components of internal controls

CRIME



CONTROL ENVIRONMENT


RISK ASSESSMENT


CONTROL ACTIVITIES


INFORMATION & COMMUNICATION


MONITORING

Control environment

Sets tone of organization


CHOPPER


Commitment to competence- sincere interest on part of employees in performing good work


Human resources policies & practices- minimize difficulties created by new employees by sound hiring & training policies for employees


Organizational structure- different internal control problems for different types company's


Participation of those charged with goverance- an audit committee of board director that monitors internal control function produces more attentive management


Philosophy of management & mgt style- the belief in it is important


Ethical values & intergrity-


Responsibilities assignment

Control activities

PIPS


Performance reviews


Information processing


Physical controls


Segregation- ARCC


Autorization


Recording


Custody


Comparison

Procedures of testing controls

RIIO


Reperformance


Inspection


Inquiry


Observation

When should controls be tested if haven't changed

Once every 3 years

Material weakness

A deficiency or combination of deficiencies reasonable possibility that material misstatement

Significant deficiency

Less serve than a material weakness yet important enough to merit attention

How many days much significant or material weakness be communicated in?

60 days

Must it be in writing

Yes

To who do u issue

Those charge with goverance & management

What must the report contain for financial statements audit

Purpose- not to provide assurance on effectiveness of internal controls


Definition of material weakness


Limited use- not intended for others


Auditors consideration of internal controls was not designed to identify all significant deficiencies or material weaknesses

SSAE 15 Attestation to examine internal controls

Form an opinion as to the effectiveness of internal control over financial reporting

Must attestion to examine report be in writing

Yes, within 60 days of report release date

What must report contain for internal control

Independent


Management responsibilities


According to AICPA


Management assertion


Auditors responsibility


Definition of internal control


Opinion


Date & signature report


PCAOB standard 5

Sames as SASSAE 15


Except does not report on efficiency or the effectiveness of internal control but reports on management's assessment of it & no date.


Done with audit


Both material weakness & significant deficiencies & control defencies should be reported prior to issuance


prior to issuance


In report include city & state


In accordance with PCAOB


Definition of material weakness different to GAAS, GAAS include "prevent, detect & correct" PCAOB doesn't have correct