Internal Audit

Component of internal control under the COSO framework include:

• Risk assessment

• Professional ethics and responsibilities

• Human resources.

• Client acceptance

An internal control that may be useful in the detection of integrity violations is:

• Segregation of incompatible duties.

• Periodic surprise cash counts

• Regularly scheduled site visits

• Properly designed forms

It is important that an internal audit department's statement of purpose, authority, and responsibility detail:

• The distribution of responsibilities between the internal and external auditors

• The organizational status of the internal audit function

• Whether the agency head will present audit findings to the oversight committee

• Under what circumstances the internal audit director may have confidential access to the oversight committee.

Internal controls are grouped into the following categories:

• Effective operations, financial reporting, and compliance.

• Efficient operations, financial analysis, and management reporting

• Efficient operations, financial analysis, and compliance

• Production and operations, financial reporting, and management reporting.

Which one is the third line of defense in risk control for an organization

• Board Of Directors

• Internal Audit

• Operating Staff

• Compliance staff

The following are COSO internal control framework components EXCEPT:

• Control Environment

• Shareholder activity

• Control activity

• Monitoring Activities

Management adopts a balanced and pragmatic approach to grow the business, taking calculated risk based on a sound assessment of market conditions and business capabilities and pursuing short and long-term objectives which are realistic and achievable. This approach reflects which COSO control component?

• Control Environment

• Monitoring Activities

• Control Activities

• Risk Assessment

The purposes of internal control include: (i) safeguarding assets, (ii) ensuring financial statement truthfulness, (iii) promoting operational efficiency, (iv) encouraging compliance with management's directives.

• (i), (ii) and (iii) only.

• (ii), (iii) and (iv) only.

• (i), (iii) and (iv) only.

• (i), (ii), (iii) and (iv).

The directors of ABC Corp. are reevaluating their “tone at the top.” They realize the phrase “tone at the top” is used to describe the example set by directors, officers and executives through their statements and daily actions. The board members also realize written policies need to reinforce the tone, but are unsure how to integrate written policies into the “tone at the top.” If you were advising the board, what would you tell them is the cornerstone of these policies?

• A comprehensive code of conduct

• Risk Policy

• Organization communications

• Protection of the organization’s assets

Control activities can be defined as:

• A means to an end

• Authorized procedures

• The particular category in which a control is placed

• The actions of people to help ensure that management directives necessary to address risks are carried out