Ais Study Guide - Chapter 7

Front 1

Internal control definition

Back 1

The process implemented by the board of directors, management, and those under their direction to provide reasonable assurance that the following control objectives are achieved.

Front 2

Preventive Controls

Back 2

Controls that deter problems before they arise. Effective preventive controls include hiring qualified accounting personnel; appropriately segregating employee duties; and effectively controlling physical access to assets, facilities, and information.

Front 3

Detective Controls

Back 3

Controls designed to discover control problems when they arise.

Front 4

Corrective Controls

Back 4

Procedures that remedy problems that occur.

Front 5

SOX

Back 5

Prevent financial statement fraud. Make financial reports more transparent. Protect investors. Strengthen internal controls in publicly-held companies. Punish executive who perpetrate fraud.

Front 6

COBIT

Back 6

The framework addresses the issue of control from three dimensions: business objectives, IT resources, IT processes.

Front 7

COSO ERM Objectives

Back 7

Strategic, operations, reporting, and compliance.

Front 8

Inherent Risk

Back 8

The susceptibility of a set of accounts or transactions to significant control problems in the absence of internal control.

Front 9

Residual Risk

Back 9

The risk that remains after management implements internal controls or some other form of response to risk.

Front 10

There are four ways to response to risks

Back 10

Reduce it, Accept it, Share it, or Avoid it.

Front 11

Ways to control activities

Back 11

Segregation of duties, proper authorization of transactions and activities.