Describe the function of how internal controls reduce risk and how would one design controls to reduce risk?
Internal control is a set of policies that detect and prevent fraud within an organization and helps in the smooth functioning of an organization, where it abides with the laws reflects the financial statements in a a true and reliable manner .
The organization has to delegate responsibility to ensure that all the functions of the organization are taken care of by specific departments. So, the internal control system will ensure that proper delegation of power is happening, proper documents are prepared while hiring employees, the responsibilities are shared within the employees in the proper manner. Proper security measures are installed in the workplace so that the property of the organization is safeguarded from theft and damage. An audit team is also assigned to ensure that the financial statements provide a true and correct information about the financial position of the organization. The rules and regulations set by the organization should also comply with the laws of the country in which the organization operates. Proper monitoring and communication within the organization also ensure that the internal control system has been designed effectively and will ensure smooth operations within the business and also reduce risk.
Describe the function of how internal controls reduce risk and how would one design controls to...
what are some examples of internal controls based on experience? How are internal controls related to the Sarbanes-Oxley legislation? Separately, what is the role of the internal audit function in an organization, and how does this function relate to internal control?
1. Detection risk is the risk a. that internal controls will not be followed. b. that the business will naturally experience, regardless of internal controls. c. that measures the effectiveness of a firm's internal controls. d. that an internal audit will not uncover incidents where controls have not been followed. 2. Which one of the following types of audits would be most likely to focus on objectives related to the efficient use of resources? a. Operational audit b. Independent audit...
How would you mitigate risk for purchases, payroll, and fixed assets? Describe a possible internal control plan for purchases and fixed assets.
identify what type of internal controls would ensure proper classification of cash equivalents. How would that fit into the company's overall system of internal controls over cash? Use examples to illustrate your position, and be sure to cite GAAP to support your claims.
With unlimited resources and security controls, it is possible to reduce risk to zero. True or False
Design an experiment to determine the optimal temperature for enzyme function, complete with controls. Where would you find the enzymes for this experiment? What substrate would you use?
9. Impact of occurrence of a risk depends upon? design and operational effectiveness of controls. directive and preventive controls. detective and corrective controls. Stress tests. The correct answer is ___ 10. Role of controls in mitigating risk depends upon: design and operational effectiveness of controls. directive and preventive controls. detective and corrective controls. scenario analysis. The correct answer is ___ 11. Which of the following would be operational risk manager’s MAJOR concern when a firm introduces major layoffs during a...
Why are organizations concerned about their internal controls? How do the internal controls affect the audit planning process? Why do auditors need to consider the client's internal controls
Describe the five key elements of internal controls. (10 marks)
Which of the following is not a component of internal controls? A. Monitoring. B Inherent risk. C. Control activities. D. Control environment.