Exam (elaborations)
WILEY CPA BEC 100% CORRECT ANSWERS!!!
- Course
- Institution
WILEY CPA BEC 100% CORRECT ANSWERS!!!...
[Show more]
Content preview
WILEY CPA BEC 100% CORRECT ANSWERS!!!General Controls- Controls that affect the environment as a whole. Applies to all
functions, not just accounting applications. General controls help assure that data
integrity is maintained.
Feed forward control-ANS A process whereby future results are projected based on
current and past information and, if the future results are undesirable, the inputs to the
system are changed to avoid the projected outcome. Many inventory ordering systems
are essentially feed-forward controls: The system projects product sales over the
relevant time period, identifies the current inventory level, and orders inventory
sufficient to fulfill the sales demand.
define feedback controls - ANSWER A process in which the outcome of an activity is
checked and if the results are not satisfactory, the activity is modified to produce more
favorable results. Many detective controls are also feedback controls.
Internal control-internal control definition- An internal process designed and instituted
by the organization's Board of Directors, management and other personnel that
provides reasonable assurance that the following objectives are being achieved:
Effectiveness and efficiency of operations Reliability of financial reporting Compliance
with applicable laws and regulations.
Define "risk response" (according to the COSE ERM model). - ANSWER management's
response to risk. Depends on management's risk appetite. May include risk avoidance,
reduction, sharing or acceptance.
Define "event identification" (according to the COSO ERM model). - ANSWER identifying
events that might affect - either positively or negatively - the organization's ability to
meet its objectives
define "objective setting" COSO ERM model ANSWER a firm must identify objectives at
four levels including strategic, operation, reporting, & compliance
,define "control activities" COSO internal and ERM models ANSWER one of the five
components of internal control. Refers to the policies and procedures that ensure
organizational actions enable management to address key risks related to achievement
of its objectives
Define strategic objectives according to the COSO model. State one of the five
components of internal control. Monitoring and testing of the control system gives
ongoing reliability of information and control processes.
Information and communication [COSO internal control framework]-One of five
components of internal control. Enable an organization's people to obtain, process, and
communicate the information needed to manage and control its operations.
Define "risk assessment" According to the COSO internal control framework - ANSWER
one of five components of internal control. The process of identifying and analyzing, and
managing the risk related to achieving the organization's objectives
define "control environment" (per the COSO internal control framework) - ANSWER one
of five components of internal control. In-cludes management's philosophy toward
controls, organizational structure, system of authority and responsibility, personnel
practices, and policies and procedures. The core or foundation of any system of internal
control
define organizational policies - ANSWER The organization's control activities that
establish stakeholder expecta-tions regarding conduct and operations
define the term accountability as it relates to designing internal control - ANSWER
holding individuals responsible for their internal control responsibilities
define "competence" as it relates to designing internal control - ANSWER an
organization's commitment to attract, develop, and retain competent individuals in
positions to enable the organization to achieve its objectives. This definition includes
establishing policies, assessing competencies and planning for turnover and
succession
,How does monitoring contribute to corporate governance? - ANSWER Monitoring is the
underlying, foundational control element of the COSO ERM model. Controls deteriorate
with time, technologies change and improve, and people either forget or become
complacent. For these reasons, monitoring has a very important role in the maintenance
of proper internal control and good risk management.
define key controls - ANSWER Controls that are most important to monitor in order to
support a conclusion about the internal control system's ability to manage or mitigate
meaningful risks.
define evaluator - ANSWER An individual who monitors internal control. Must have skills,
knowledge, and authority sufficient to understand risks and identify the controls needed
to manage those risks. Two most important attributes are competence and objectivity.
Control Competence for a control evaluator includes knowledge about the control and
related processes, including the manner in which controls are expected to operate and
what constitutes a control deficiency.
The three components of establishing a foundation for control are: - ANSWER 1. tone at
the top
2. organizational structure
3. baseline understanding of control effectiveness
List the four activities that comprise the design and execution of control monitoring. -
ANS 1. identify and prioritize risks
2. identify controls
3. identify persuasive information about controls
4. implement monitoriing procedures
name the three activities that comprise assessing and reporting on control monitoring -
ANS 1. prioritize findings
2. report results as appropriate
, 3. follow up to implement corrective actions
Define enterprise risk management - ANSWER COSO The methods and processes used
by organizations to identify and manage the events and circumstances that influence
the organization's ability to achieve its objectives
what is meant by the tone at the top? - ANSWER Extent to which top management is
ethical and is pro-active in establishing the organization's ethical tone and culture.
Counter-example: Kenneth Lay urged fellow Enron employees to buy more Enron stock
while at the same time he was selling millions of dollars of Enron stock options ; this is
what's referred to as a "pump and dump: scheme.
per COSO, which four critical accounting activities are to be segregated? - ANSWER 1.
authorizing
2. recording
3. safeguarding
4. reconciling, oversight, and auditing
define risk appetite - ANSWER According to COSO, the amount of risk exposure, or
potential adverse impact from an event, that an organization chooses to accept or
retain, as opposed to sharing, avoiding, reducing or eliminating the risk.
Identify x-axis and y-axis of a graph. - ANSWER "X" axis is the horizontal line; "Y" axis is
the vertical line. (To help remember, the "Y" has a vertical element to it.)
Describe the relationship between economic resources and compensation in a free
market economy. AnS Business firms acquire economic resources from
individuals-labor, capital, and natural resources-who receive compensation in
return-wages/salaries, rents, interest, dividends, etc Individuals use this compensation
to acquire goods and services produced by business
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Easton. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77254 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now