Internal control, components, procedures, and laws [20-25 min]TERMS:DEFINITIONS:1. Interna...

TERMS:

DEFINITIONS:

1. Internal control

A. What internal and external auditors do.

2. Control procedures

B. Part of internal control that ensures resources are not wasted.

3. Firewalls

C. Law passed by congress to address public concerns following the Enron and WorldCom scandals.

4. Encryption

D. Should be pre-numbered to prevent theft and inefficiency.

5. Control environment

E. Limits access to a local network.

6. Information system

F. Example: The person who opens the bank statement should not also be the person who is reconciling cash.

7. Separation of duties

G. Identification of uncertainties that may arise due to a company?s products, services, or operations.

8. Monitoring of controls

H. May be internal and external.

9. Documents

I. Without a sufficient one of these, information cannot properly be gathered and summarized.

10. Audits

J. The organizational plan and all the related measures that safeguard assets, encourage employees to follow company policy, promote operational efficiency, and insure accurate and reliable accounting data.

11. Operational efficiency

K. Component of internal control that helps ensure business goals are achieved.

12. Risk assessment

L. Rearranges data by a mathematical process.

13. Sarbanes-Oxley Act

M. To establish one, a company?s owner/CEO and top managers must behave honorably to set a good example for employees.