ACTG 474 Exam 1 With
Complete Solution
How is a flowchart different from a DFD? (data flow diagram) - ANSWER a
flowchart has more procedures
whereas a DFD is more abstract and more process
a dashed line between two elements in a flowchart represent what? -
ANSWER a flow of data/information
a physical flow of documentation - ANSWER →
a branch in a decision - ANSWER
a transmission of data via a communication line - ANSWER ↯
in a DFD diagram, when two elements share an arrow between a source and a
process this suggests what? - ANSWER the two data elements flow together
what is an internal control? - ANSWER a process that gives reasonable
assurance that the firms objectives are achieved
type of internal controls - ANSWER corrective- identify and correct problems
as well as correct and recover from the resulting errors
detective- discover problems that were not preventive
preventative- deter problems before they arise
examples of the types of internal controls - ANSWER corrective- maintain
backups, correcting data entry errors
,detective- bank reconciliation
preventative- segregating duties, access controls
threats to objectives - ANSWER hardware malfunctions, loss of personnel,
natural disasters, intentional acts
sarbanes- oxley (SOX) 2002 - ANSWER what does SOX do?
it changes the law governing auditing and corporate responsibility
who does SOX affect? - ANSWER -board of directors
-"C"- level executives (CEO, CFO, etc.)
-auditors
who benefits from SOX? - ANSWER -investors
-accountants
SOX highlights - ANSWER -regulates auditors more closely
-created the Public Company Accounting Oversight Board (PCAOB)
-regulates board of directors more closely
-regulates management more closely
COSO - ANSWER committee of sponsoring organizations:
is a joint initiative that aims to provide a framework for organizations to
improve their governance, risk management, and internal controls.
Established in the late 1980s, COSO is well-known for its Internal
Control—Integrated Framework and Enterprise Risk
, Management—Integrated Framework.
Enterprise Risk Management (ERM) - ANSWER was an attempt to develop a
standardized comprehensive framework for internal controls
ERM- Internal environment - ANSWER -the people side of things
-reflects an entity's enterprise risk management philosophy, risk appetite,
board oversight, commitment to ethical values, competence and
development of people, and assignment of authority and responsibility.
It encompasses the "tone at the top" of the enterprise and influences the
organization's governance process and the risk and control consciousness of
its people.
Board of directors - rubber stamped boards (yes men)
What happens when someone violates its standards
ERM- objective setting - ANSWER management sets strategic objectives,
which provide a context for operational, reporting and compliance
objectives. objectives are aligned with the entity's risk appetite, which drives
risk tolerance levels for the entity, and are a precondition to even
identification, risk assessment and risk response
ERM- Event identification - ANSWER events that could affect you strategy,
especially negative occurrences
Complete Solution
How is a flowchart different from a DFD? (data flow diagram) - ANSWER a
flowchart has more procedures
whereas a DFD is more abstract and more process
a dashed line between two elements in a flowchart represent what? -
ANSWER a flow of data/information
a physical flow of documentation - ANSWER →
a branch in a decision - ANSWER
a transmission of data via a communication line - ANSWER ↯
in a DFD diagram, when two elements share an arrow between a source and a
process this suggests what? - ANSWER the two data elements flow together
what is an internal control? - ANSWER a process that gives reasonable
assurance that the firms objectives are achieved
type of internal controls - ANSWER corrective- identify and correct problems
as well as correct and recover from the resulting errors
detective- discover problems that were not preventive
preventative- deter problems before they arise
examples of the types of internal controls - ANSWER corrective- maintain
backups, correcting data entry errors
,detective- bank reconciliation
preventative- segregating duties, access controls
threats to objectives - ANSWER hardware malfunctions, loss of personnel,
natural disasters, intentional acts
sarbanes- oxley (SOX) 2002 - ANSWER what does SOX do?
it changes the law governing auditing and corporate responsibility
who does SOX affect? - ANSWER -board of directors
-"C"- level executives (CEO, CFO, etc.)
-auditors
who benefits from SOX? - ANSWER -investors
-accountants
SOX highlights - ANSWER -regulates auditors more closely
-created the Public Company Accounting Oversight Board (PCAOB)
-regulates board of directors more closely
-regulates management more closely
COSO - ANSWER committee of sponsoring organizations:
is a joint initiative that aims to provide a framework for organizations to
improve their governance, risk management, and internal controls.
Established in the late 1980s, COSO is well-known for its Internal
Control—Integrated Framework and Enterprise Risk
, Management—Integrated Framework.
Enterprise Risk Management (ERM) - ANSWER was an attempt to develop a
standardized comprehensive framework for internal controls
ERM- Internal environment - ANSWER -the people side of things
-reflects an entity's enterprise risk management philosophy, risk appetite,
board oversight, commitment to ethical values, competence and
development of people, and assignment of authority and responsibility.
It encompasses the "tone at the top" of the enterprise and influences the
organization's governance process and the risk and control consciousness of
its people.
Board of directors - rubber stamped boards (yes men)
What happens when someone violates its standards
ERM- objective setting - ANSWER management sets strategic objectives,
which provide a context for operational, reporting and compliance
objectives. objectives are aligned with the entity's risk appetite, which drives
risk tolerance levels for the entity, and are a precondition to even
identification, risk assessment and risk response
ERM- Event identification - ANSWER events that could affect you strategy,
especially negative occurrences
