Corporate Governance Flashcards
(9 cards)
The five components of COSO internal control framework.
- Risk Assessment
- Information and Communications
- Control Environment -this is the core and foundation of any system of internal control
- Control Activities
- Monitoring
What is Strategy and Objective-Setting in ERM framework?
Strategy and Objective-Setting concerns analyzing the business context, defining risk appetite, evaluating business strategies, and formulating business objectives.
What is Governance and Culture in ERM framework?
Governance is the allocation of roles, authorities, and responsibilities among stakeholders including attracting, retaining, and developing capable individuals. Principle 5 of ERM framework.
What is Information, Communication, and Reporting in ERM framework?
Communication is the continual, iterative process of obtaining and sharing information to facilitate and enhance ERM. This function includes reporting on the organization’s risk, culture, and performance.
What is Performance in ERM framework?
This component is concerned with risk identification and assessment that helps an organization achieve its strategy and business objectives.
The seven factors of the control environment.
(1) integrity and ethical values, (2) commitment to competence, (3) human resource policies and practices, (4) assignment of authority and responsibility, (5) management’s philosophy and operating style, (6) board of directors or audit committee participation, and (7) organizational structure.
The principles related control environment.
- Demonstrate a commitment to integrity and ethical values.
- Demonstrate a commitment to attract, develop and retain competent individuals.
- Hold individuals accountable for their internal control responsibilities.
Unstructured Data and structured data.
Unstructured data is text; structured data is numeric.
Definition of Internal Control.
internal control as a process—effected by an entity’s board of directors, management, and other personnel—designed to provide reasonable assurance regarding the achievement of objectives in the following categories: (1) reliability of financial reporting, (2) effectiveness and efficiency of operations, and (3) compliance with applicable laws and regulations.
