ACCT 3222 Chapter 6 Questions with Correct
Answers
when was COSO formed?
1985
when was the internal control: integrated framework (COSO report) issued?
1992
what does the COSO framework do? (3 things)
- established a common definition of IC that addresses all interested users
- addressed three objectives of IC:
1. operations
2. reporting
3. compliance
- provided a framework in which companies could assess their ICs
what is COSOs definition of internal control?
a process, effected by an entity's board of directors, management, and other personnel,
designed to provide reasonable assurance regarding the achievement of the objectives related
to operations, reporting, and compliance
what are the three dimensions of the COSO framework?
1. objectives
2. components
3. organizational structure
what are the COSO objectives?
, 1. operations
2. reporting
3. compliance
what are the COSO components?
CRIME
1. control environment
2. risk assessment
3. existing control activites
4. information and communication
5. monitoring activities
what are the COSO organizational structure parts?
1. Entity
2. Division
3. Operating Unit
4. Function
when was the COSO update released?
2013
why do we bother gaining an understanding of controls?
to assess the CR component of RMM
what are the eight steps in assessing control risk?
1. understand and document entity-level controls
2. Understand the flow of transactions
Answers
when was COSO formed?
1985
when was the internal control: integrated framework (COSO report) issued?
1992
what does the COSO framework do? (3 things)
- established a common definition of IC that addresses all interested users
- addressed three objectives of IC:
1. operations
2. reporting
3. compliance
- provided a framework in which companies could assess their ICs
what is COSOs definition of internal control?
a process, effected by an entity's board of directors, management, and other personnel,
designed to provide reasonable assurance regarding the achievement of the objectives related
to operations, reporting, and compliance
what are the three dimensions of the COSO framework?
1. objectives
2. components
3. organizational structure
what are the COSO objectives?
, 1. operations
2. reporting
3. compliance
what are the COSO components?
CRIME
1. control environment
2. risk assessment
3. existing control activites
4. information and communication
5. monitoring activities
what are the COSO organizational structure parts?
1. Entity
2. Division
3. Operating Unit
4. Function
when was the COSO update released?
2013
why do we bother gaining an understanding of controls?
to assess the CR component of RMM
what are the eight steps in assessing control risk?
1. understand and document entity-level controls
2. Understand the flow of transactions
