Final Lecture

Question 1

Internal control framework coso (the one you should know) in book on page 31

Answer 1

Control environment (base)

Question 2

A Risk

Answer 2

Not achieving your objectives or goal

Once you know what you want to achieve you know what your risk is

Question 3

General controls

Answer 3

If you have a pc and the controls are built in regardless

Question 4

Position of AIS function

Answer 4

Who is responsible for AIs

Depends

Small firm = head of accounts department

Large corp= financial/business controller

Huge = CFO

Even bigger = internal Audit department

Question 5

1st line of defense

Answer 5

Person in charge of department

Eg for warehouse - warehouse manager

Question 6

2nd line of defense

Answer 6

Checking if the manager has done his work right

Financial controller 
Accounts department 
Risk management department 
Quality control 
Inspection 
Compliance officer (all rules and laws obeyed )

Question 7

3rd line of defence

Answer 7

Internal audit departments

4th line -external auditor

Question 8

Efficiency of AIS función

Answer 8

Use of IT

Shared service centres - a holding company - with many subsidiaries - all those subs have payables and receivables and employees

Use a shared service centre if the processes are standard (the same )

Can outsource the shared service centre to place it in another company

Question 9

Information communication

Answer 9

Information you use to operate your business

10 bikes lost - budget for them

Question 10

Monitoring

Answer 10

Information to see whether the internal controls are working - detailed checks

Checking how you have organised the business with internal controls and if they work

2nd purpose - organise internal controls as you want to achieve some objectives

Question 11

Role of supervisory board

Answer 11

Supervisory board

COO CEO CFO (top of organisation)

Rest of firm

Supervisory board supervises everything below it, decides pay of ceo, appoints new ceo etc