Cia Part I - Su 3.2 Classifying Controls

Front 1

What are the primary controls?

Back 1

1) preventive controls
2) detective controls
3) corrective controls
4) directive controls

Front 2

What do preventive controls do?

Back 2

Deter the occurrence of unwanted events
(e.g. storing petty cash in a locked safe and segregating duties)

Front 3

What do detective controls do?

Back 3

- alert the proper people after an unwanted event
(e.g. a burglar alarm)
- determines the amount of losses

Front 4

What do corrective controls do?

Back 4

correct the negative effects of unwanted effects
(e.g. requirement that all cost variances over a certain amount be justified)

Front 5

What do directive controls do?

Back 5

encourage the occurrence of a desirable event

Front 6

What do directive controls include?

Back 6

- policy and procedure manuals
- employee training
- job descriptions

Front 7

What are secondary controls?

Back 7

1) compensatory (mitigative) controls
2) complementary controls

Front 8

What do compensatory controls do?

Back 8

reduce risk when primary controls are ineffective
(e.g. supervisor reconciles the clerk's count of cash on the previous day with the cash register data)

Front 9

What do complementary controls do?

Back 9

work with other controls to reduce risk to an acceptable level
(e.g. separating the functions of accounting for and custody of cash receipts is complemented by obtaining deposit slips validated by the bank)

Front 10

What do application controls include?

Back 10

input, processing and output controls

Front 11

What do input controls comprise?

Back 11

- batch input controls (e.g. hash totals and record counts comparison to expected values)
- online input controls
(e.g. field checks, validity checks, limit and range checks)

Front 12

What do processing controls do?

Back 12

ensure that data are complete and accurate during updating

Front 13

What do output controls do?

Back 13

ensure that processing results are complete, accurate, and properly distributed

Front 14

What is an important output control?

Back 14

user review

Front 15

What is a time-based classification of controls?

Back 15

1) feedback controls
2) concurrent controls
3) feedforward controls

Front 16

What do feedback controls do?

Back 16

report information about completed activities (e.g. inspection of completed goods)

Front 17

What do concurrent controls do?

Back 17

adjust ongoing processes in real time (e.g. supervision of production-line workers)

Front 18

What do feedforward controls do?

Back 18

anticipate and prevent problems (e.g. policies and and procedures)

Front 19

What are the objectives of financial controls?

Back 19

1) authorization
2) recordkeeping
3) safeguarding of assets
4) compliance with laws

Front 20

What type of control ensures best the proper authorization of financial transactions?

Back 20

policies requiring review of major transactions by the board

Front 21

Which type of controls is often difficult for internal auditors to evaluate because of the lack of criteria or standards?

Back 21

operating controls

Front 22

To what do operating controls apply?

Back 22

production and support activities

Front 23

What is a control matrix useful for?

Back 23

for matching controls with risks inherent to the item under control

Front 24

What is organization as a means of control?

Back 24

intentional structuring of roles assigned to people

Front 25

What kind of control does minimizing the loss of assets requires?

Back 25

a preventive control.

Front 26

What is the management’s directing function?

Back 26

Directing is the process of motivating people in an organization to contribute effectively and efficiently to the achievement of the entity’s objectives and goals

Front 27

What is the definition of organizing?

Back 27

Organizing is the intentional design and structuring of tasks and roles to accomplish organizational goals.