1. Coso Model having 5 components : (CE) Control Environment, (RA) Risk Assessment, (CA) Control Activities, (I&C) Information and Communication & (M) Monitoring, applied to the following statement are mentioned against the respective statements.
Statements | COSO component | Symbols |
The organization specifies objectives with sufficient clarity to enable the identification and assessment of risks relating to objectives | Risk Assessment | RA's |
The organization selects, develops, and performs ongoing and/or separate evaluations to ascertain whether the components of internal control are present and functioning. | Monitoring Activities | M's |
The organization selects and develops general control activities over technology to support the achievement of objectives | Control Activities | CA's |
The organization selects and develops control activities that contribute to the mitigation of risks to the achievement of objectives to acceptable levels | Control Activities | CA's |
The organization obtains or generates and uses relevant, quality information to support the functioning of internal control. | Information and Communication | IC's |
The organization internally communicates information, including objectives and responsibilities for internal control, necessary to support the functioning of other components of internal control. | Information and Communication | IC's |
The organization identifies risks to the achievement of its objectives across the entity and analyzes risks as a basis for determining how the risks should be managed | Risk Assessment | RA's |
The organization identifies and assesses changes that could significantly impact the system of internal control | Risk Assessment | RA's |
The organization holds individuals accountable for their internal control responsibilities in the pursuit of objectives. | Control Environment | CE's |
The organization evaluates and communicates internal control deficiencies in a timely manner to those parties responsible for taking corrective action, including senior management and the board of directors, as appropriate | Monitoring Activities | M's |
The organization deploys control activities through policies that establish what is expected and procedures that put policies into action | Control Activities | CA's |
The organization demonstrates a commitment to integrity and ethical values. | Control Environment | CE's |
The organization demonstrates a
commitment to attract, develop, and retain competent individuals in alignment with objectives. |
Control Environment | CE's |
The organization considers the potential for fraud in assessing risks to the achievement of objectives. | Risk Assessment | RA's |
The organization communicates with external parties regarding matters affecting the functioning of internal control. | Information and Communication | IC's |
The board of directors demonstrates
independence from management andexercises oversight of the development and performance of internal control. |
Control Environment | CE's |
Management establishes⎯with board oversight⎯structures, reporting lines, and appropriate authorities and responsibilities in the pursuit of objectives. | Control Environment | CE's |
2. 15 pts. We have discussed in length the COSO model for an effective system of...
6. The control environment includes all of the following COSO Principles of Internal Control, EXCEPT A : the organization demonstrates a commitment to integrity and ethical values. B : the organization identifies risks to the achievement of its objectives across the entity and analyzes risk as a basis for determining how the risks should be managed. C : the organization holds individuals accountable for their internal control responsibilities in the pursuit of objectives. D : the board of directors demonstrates...
for each control enviroment princple provide an examplw of how
an organization might appy that princple
Exhibit 3.2. Principles Associated with the Control Environment 1. The organization demonstrates a commitment to integrity and ethical values. 2. The board of directors demonstrates independence from management and exercises oversight of the development and performance of internal control 3. Management establishes, with board oversight, structures, reporting lines, and appropriate authorities and responsibilities in the pursuit of objectives 4. The organization demonstrates a commitment...
Every year, the board of directors of Northern Power, a distributor of electricity, commissions an effectiveness evaluation of its audit committee. An independent consultant with expertise in governance reviews the means by which the audit committee fulfills its responsibilities, as set out in its charter. Specifically, it evaluates how the members of the audit committee: Oversee the quality and reliability of financial reporting and disclosures Understand the key risks facing the organization and the processes management uses to identify, assess,...
Question 3 1 pts What does Coso define as 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? Risk assessment Compliance Internal control o Reporting D Question 4 1 pts The control environment refers to both the financial statements of the client and the audit work being conducted speaks to the ability of the client to gain funding in...
Urganizational governance is: O a. Tactical management O b. Day to day management of the organization O c Compliance O d A process by which organizations select objectives estab sh processes to achieve objectives, and monitor performance Type here to search 40 2 3 4 5 6 8 Risk responses do not include: O a. Staying in the activity that is giving rise to the risk O b. Sharing a risk by, for example, buying insurance or outsourcing the activity...
1. Consider the following statements: I. Per COSO, Control Activities are the policies and procedures that help insure that management’s directives are carried out. II. A Reliance Strategy is used when control risk is considered High. a. I is true; II is true b. I is true; II is false c. I is false; II is true d. I is false; II is false 2. Management's attitude toward aggressive financial reporting and its...
7:58 4 1 E - MULTIPLE-CHOICE QUESTIONS AVY When .com with The Ca s tle a . De that is Select the best answer for each of the following questions. 5. Which of the following statements is business objectives? ments is not true abor. a. Business objectives represent targets of performance. susiness objectives is a 1. Which of the following are components of the definition of internal auditing? a. Independence and objectivity. b. A systematic and disciplined approach. c. Helping...
PART 2 THE COSO FRAMEWORK CASE (22 MINUTES - 29 MARKS) Wellness is nutrition supplement provider and is planning a public offering in the next two years. The CEO and CFO are close friends since high school and their spouses and children have become friends too. Wellness has an independent audit committee of board of directors that oversees the external and internal auditors. The audit committee also sets management compensation based on financial results. The company is planning an expansion...
1. Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee? A. Management's failure to renegotiate unfavorable long-term purchase commitments.B. Recurring operating losses that may indicate going concern problems.C. Evidence of a lack of objectivity by those responsible for accounting decisions.D. Management's current plans to reduce its ownership equity in the entity. 2. After obtaining an understanding of internal control and arriving at a preliminary assessed level...
Review the Audit report (found in the 10-K) for the following
two companies. Highlight or summarize
differences between the reports (other than the name of Company,
Audit Firm, Financial statement
period covered).
Note:
1. Each Company may have two audit reports (one opinion on
financial statements and one for
audit of internal controls) or the two opinions may be combined
into one report.
2. You are not required to review the entire 10-K. Find the
audit report in the 10-K...