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10 Cards in this Set

  • Front
  • Back
Why do we need corporate governance
to overcome agency problem
Who has marjor control over mgmt?
External auditors
Internal auditors
Credit rating agency
Internal control system
security analyst
Objective of Internal control
1. Financial information reliability
2. Operating efficiency and effectiveness
3. compliance with law
Components of Internal Control (5)
1. control environment
2. assessment of risk
3. control activities
4. information and communication
4. monitoring
Limitations of internal control
1. Mgmt can override
2. segeration can be circumvented by collusion
3. can breakdown due to bad judgement
4. can can not excced benefit
What does Enterprise Risk Mgmt do?
A process designed to identify potential events that may affect the organization and manage risk to be within it's risk appetite and provide resonable assurance regarding achieving objectives
What is Risk Appetite
the amount of risk an organization will accpet to acheive it's objectives
What are the 8 componentes of Risk Mgmt
1. Control environment
2. Objective setting
3. Risk identification
4. Risk assessment
5. Risk respone
6. Control activities
7. Information and communication
8. Monitoring
Individual that monitors internal control within an organization
Must be competent and objective
Inherent Risk
Risk to the organization if managment does nothing to alter it's likelihood or impact