DR.LORAAS AIS EXAM 1 | with complete questions and answers 2023

DR.LORAAS AIS EXAM 1 | with complete questions and answers 2023 What are the 5 Elements of the COSO Framework - 1) Control enviornment 2) Risk Management 3) Control Activities 4) Information & communication 5) Monitorning Control Environment - Tone at the Top Integrity and ethical values Board demonstrates independance from managers develop and train competent people includes the boundaries of acceptable behavior, importance of internal controls, and the overall culture of the company Risk Management - Organization identifies potential for fraud Identifies risk to internal controls Opportunity, Rationalization, Pressure Control activities - Control activities that contribute to the mitigation of risks: Policies & Procedures: Can be- Preventative, Detective, or Corrective Information & Comunication - Company obtains or generates relevant, quality information for the business to run effectively What Is a business Process? - An activity, or set of activities that accomplish a specific organizational goal. Sales, Purchasing, payroll. Etc. Why do we Care? - Because they end up on our financial statements. Sales= REVENUES Purchases= Expenses,assets, liabilities payroll= expenses, Liabilities What types of posts are likely to be exaggerated? - Sales, Revenues What types of post are likely to be played down? - expenses, liabilities. etc... Managements assertions about transactions & events - Occurrence Completeness Authorization Accuracy Cuttoff Classification Occurance - All transactions that have been recorded have occurred and pertain to the entity ANYTHING a Manager might want to OVERSTATE to make financials look better. SALES = High Occurance Completeness - All transactions that SHOULD have been recorded have been recorded. More concerned with Understatements Authorization - All transactions and events have been properly authorized. Credit check Shipment of goods Setting Price Includes freight & terms Approvals of Credit to accounts receivable, returns and allowances or write off of uncollectibles Determining Cash Discounts allowed Accuracy - Amounts and data relating to recorded transactions and events have been recorded appropriately. Cuttoff - Transactions and events have been recorded in the correct accounting period. Classification - Transactions and events have been recorded in the proper accounts Normal steps in "order to cash" process - 1) Order entry (receive order) 2)Check credit/ inventory 3)Pick & Pack/ Shipping- Bill of lading 4)Invoice (price list, Sales order, Bill of lading) 5)Sales Journal + A/R Sub. 3 way match - Key Control in the procure to pay process "purchases" Purchase order Receiving report Vendor Invoice bill of lading - merchandise and quanity shipped receiving report - a document that records details about each delivery, including the date received, shipper, supplier, quantity received sales invoice - An invoice used as a source document for recording a sale on account (customer ) description, quantity, price of goods purchase order - a form requesting that a vendor sell merchandise to a business purchase requisition - a form used to request the responsible person or department to purchase merchandise or other property deposit slip - A slip of paper kept by the bank to show how much money you put into your account. (helpful for bank reconciliations) credit memo - a document to credit a customer's account (sales returns and allowances) Sales return request - A document requesting authority to return goods vendors invoice - A bill sent from the vendor to the customer purchasing the goods or services purchase-to-pay process - 1. requisition of goo