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26 Cards in this Set
- Front
- Back
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Who has the most responsibility within a control system? |
- CEO and Chief Accounting Officer (CAO)
- Board of Directors - Internal Auditors - other personnel |
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Of whom do organizations reflect the ethical values and control consciousness?
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CEO
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Why does the Chief Accounting Officer play a crucial role within a system of controls?
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accounting staff have insight into all activities
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Which subcommittees must be established in organizations of sufficient size and complexity?
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- audit committee
- compensation committee - finance committee - risk committee |
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What kind of role may IA play in relation to controls?
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- consulting and advisory role
- review performance |
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What is the personnel's general duty in relation to controls?
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- information of management about not functioning controls
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How do imposed controls work?
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1) performance measurement against standards
2) taking of corrective actions |
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What is the disadvantage of imposed controls?
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corrective actions come only after poor performance
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How do self-controls work?
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- evaluation of entire management process and functions' performance
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What does a self-control attempt?
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- to improve the process (e.g. management by objectives)
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What does a strong organizational culture reduce?
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- the need for formal, written policies
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What are procedures?
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methods employed to carry out activities in conformance with policies
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What principles apply to procedures?
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the same as for policies
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How must procedures for nonmechanical operations be?
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not so detailed to stifle the use of judgment
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What is the best form of control over the performance of individuals?
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supervision
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Which practices help to improve control?
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- training of employees
- employees' performance review |
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What does budgeting do as a control?
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sets a standard for input of resources and what should be achieved as output
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Who should participate in the preparation of a budget?
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those who have to meet it
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What should those who have to meet a budget be provided with?
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information that compared budgets with actual events and shows reasons for variances
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What should all subsidiary budgets do?
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tie into the overall budget
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What should budgets set?
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measurable objectives
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Against what should the cost of preparing a report be weighed?
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report's benefits
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What has more value, an more precise or a timely report?
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a timely report
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On what must a reasonably competitive compensation be based?
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a graded plan of job classifications
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What ensures that customers' checks are immediately deposited to the organization’s account? |
a lock box system
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What are cut-off procedures? |
Cutoff relates to whether transactions and events have been recorded in the correct accounting period. Audit procedures must ensure that transactions occurring near year-end are recorded in the financial statements in the proper period. |
