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Operations Audit > Module 4: Control Frameworks > Flashcards

Module 4: Control Frameworks Flashcards

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1
Q

T or F: The past business environment has resulted in a proliferation of vulnerabilities, risks, stakeholders, and activities much more complex than ever before

A

False. The current business environment

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2
Q

Internal Control Frameworks are structures that ___, ____, and sometimes ___ an organization’s internal controls

A

organize, categorize, prioritize

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3
Q

What are the main objectives internal controls?

A
  1. Create value for stakeholders
  2. Minimize risk
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4
Q

What is the widely known internal controls framework?

A

COSO’s Internal Control Integrated Framework

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5
Q

What are the IT Control Frameworks?

A
  1. Control Objectives for Information and Related Technology (COBIT)
  2. International Organization for Standardization 17799 (ISO)
  3. Information Technology Infrastructure Library
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6
Q

What internal control framework is used for project management, process assessment and performance improvement?

A

Capability Maturity Model Integration (CMMI)

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7
Q

What are the 3 control objectives in the COSO Framework?

A
  1. Operations
  2. Reporting
  3. Compliance
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8
Q

What are the five components of internal control?

A
  1. Control Environment
  2. Risk Assessment
  3. Control Activities
  4. Information and Communication
  5. Monitoring Activities
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9
Q

What are the 4 depths of the COSO framework?

A
  1. Entity
  2. Divisions
  3. Operating Unit
  4. Function
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10
Q

What are the five principles of the Control Environment?

A
  1. Commitment to integrity and ethical values
  2. BOD exercises oversight responsibility
  3. Establish structure, authority, and responsibility
  4. Commitment to competence
  5. Enforce accountability
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11
Q

Control Environment: the workplace environment, characterized by the way the organization is structured, the manner of leadership, the degree of ____, management’s ___ ___ having and practicing the tenets of its ___ __ ____ and
statement of values.

A

openness, operating style, code of ethics

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12
Q

Control Environment: What should happen to the tone at the top?

A

Congruence

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13
Q

Control Environment: Organizational culture of?

A

Collection of Learned Beliefs

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14
Q

Control Environment: What is the result of a healthy culture and ethical environment?

A

advancement of employee morale

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15
Q

Control Environment: T or F: The Control environment includes the development of personnel

A

T

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16
Q

Control Environment: Management should also establish what in terms of risk?

A
  1. Risk Management Philosophy
  2. Risk Appetite
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17
Q

Control Environment: According to Trompenaars, organizational culture includes three key elements:

A
  1. The general relationship between employees and their organizations
  2. The vertical or hierarchical system of authority defining superiors and subordinates
  3. The general views of employees about the organization’s destiny, purpose, and goals, and their place in it
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18
Q

Control Environment: What unethical behavior should not be done?

A
  1. Undue emphasis on bottom-line performance
  2. High-pressure sales tactics
  3. Kickbacks or bribes
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19
Q

Control Environment: New employees should do what?

A

Sign documents such as code of ethics, conduct, conflict of interest to indicate that they agree to comply with them

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20
Q

Control Environment: State an example of what organization can do to enforce ethical behavior

A
  1. Company Newsletter
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21
Q

Control Environment: Consists of management practices where on the surface it appears like an essential activity has been performed when it hasn’t

A

Form over substance

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22
Q

Control Environment: ___ ___ controls are used to determine if an organization’s values, systems, policies, and processes would?

A

Entity Level, enable or dissuad fraud and encourage proper conduct

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23
Q

Control Environment: Entity level controls refer to?

A

the Entity’s Management Style

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24
Q

Control Environment: What do we audit for entity level controls?

Study These Flashcards
A
  1. Tangibles like policies and procedures
  2. Intangibles observation of management culture
25
Control Environment: Internal auditors are encouraged to remember what in regards to entity level controls?
a person's behavior is determined by the person and the environment
26
Control Environment: In the context of tone in the middle, what decision is one of the most important?
deciding who becomes a manager
27
Control Environment: workplace conditions leading to customer and employee satisfaction, turnover, profits, and the achievement of goals and objectives are dictated by what?
Tone in the middle
28
the identification, quantification, analysis, and management of organizational risks.
Risk Assessment
29
Events that can hinder an organization's ability to achieve its objectives
Risk
30
Risk Assessment: Typically are assessed along two dimensions
1. Likelihood or Probability 2. Impact or Consequence
31
Risk Assessment: What is a precondition to risk assessment?
Establish objectives
32
Risk Assessment: What are the 4 principles
6. Set suitable objectives 7. Identify and analyzes risks 8. Assess risk of fraud 9. Identify and analyze significant change
33
Control Activities: How are controls established?
policies and procedures
34
Control Activities: T or F: Controls are performed at all levels at specific stages within processes
false. at various stages
35
Control Activities: What are the 3 principles?
10. Select and develop control activities 11. Select and develop IT GCCs 12. Mobilize through policies and procedures
36
Control Activities: What do you also call directive controls?
Corrective Controls
37
Control Activities: What control activity category is training and programs
Directive
38
Control Activities: What is the main task of internal auditors?
1. Verify if controls are designed appropriately 2. If the controls are operating effectively
39
Control Activities: What are the most common answers to nonperforming controls?
1. Inadequate Knowledge 2. Sabotage 3. Emotional and Physical Reasons
40
Control Activities: An increase in no-value activities is an effect of?
Excessive Controls
41
Information and Communication: What are the principles?
13. Use relevant information 14. Communicate internally 15. Communicate externally
42
Information and Communication: ideally, there should be what from the top of the organization?
clear and consistent directions to provide criteria to measure performance results
43
Information and Communication: What information should be flowing up in the organization?
feedback about results and issues
44
Information and Communication: What should be in place to ensure cooperation and coordination among operating units?
Lateral flows
45
Information and Communication: What does clear lateral communication prevent?
1. duplication of efforts 2. purchase of asset 3. confusion
46
consist of ongoing, separate or a combination of evaluations used to determine whether each of the five components of internal control is present and functioning.
Monitor Activities
47
Monitoring Activities: T or F: Ongoing evaluations are built into business processes at different levels of the organization and provide past information on how well or poorly activities are performing
False. Not past, timely dapat
48
Monitoring Activities: Separate or cyclical evaluations will vary in terms of what?
Scope and Frequency based on risk assessment and previous evaluation
49
Monitoring Activities: What are its principles
16. Conduct ongoing/separate evaluations 17. Evaluate and communicate deficiencies
50
IT AND ITS IMPACT ON ORGANIZATIONAL SUCCESS: What should organization consider regarding the IT function?
Turn it into a business service partner instead of a back-end support unit
51
IT AND ITS IMPACT ON ORGANIZATIONAL SUCCESS: Cobit is created by? and focused on?
ISACA, ensures quality, control, and reliability of information systems
52
IT AND ITS IMPACT ON ORGANIZATIONAL SUCCESS: Cobit has four specific domains (PDAM)
1. Planning 2. Delivery 3. Acquisition 4. Monitoring
53
IT AND ITS IMPACT ON ORGANIZATIONAL SUCCESS: What is GTAG and who prepared it?
Global Technology Audit Guide, Institute of Internal Auditors
54
IT AND ITS IMPACT ON ORGANIZATIONAL SUCCESS: What is a specific attribute of GTAG?
written in a straightforward business language to address a timely issue related to IT management
55
IT AND ITS IMPACT ON ORGANIZATIONAL SUCCESS:T or F: ISO is an independent and governmental international organization
False. Non governmental
56
IT AND ITS IMPACT ON ORGANIZATIONAL SUCCESS: ISO is greek for?
Equal
57
IT AND ITS IMPACT ON ORGANIZATIONAL SUCCESS: ISO 9000 addresses what?
1. Quality Management 2. ensure products meet customer requirements 3. continuous improvement
58
IT AND ITS IMPACT ON ORGANIZATIONAL SUCCESS: ISO 17799 and 27001 addresses what and using?
1. Best practices for Information Security 2. IS Management Systems

Operations Audit (2 decks)

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