Week 5 - Components of Internal Control Flashcards
(6 cards)
1
Q
What are the five components of internal control?
A
- control environment
- risk assessment process
- control activities
- control procedures
- monitoring procedures, including audit
2
Q
Control environment
A
The tone from the top - directors should be setting the standard (saying everyone needs to be complying)
3
Q
Risk assessment process
A
Auditors assess this - go to managers and ask what their risk assessment process is - how do you manage risks the company faces?
4
Q
Control activities
A
List of detailed policies that are established - telling each department to comply with them
5
Q
Control procedures
A
What are the actual controls in place that make up these systems and policies
6
Q
Monitoring procedures, including audit
A
Who is monitoring?
- internal audit
- management own reviews
- special investigations (in case of fraud)
- audit team
