SOX for Everyone. Brief History of Internal Control, SOX, and Fundamentals of Control Frameworks Source: Brink’s Modern Internal Auditing , Robert Moeller, Wiley Publishing. Agenda for Today. What is internal control and why is it important for governmental entities?
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Brief History of Internal Control, SOX, and Fundamentals of Control Frameworks
Source: Brink’s Modern Internal Auditing, Robert Moeller, Wiley Publishing
Under the 2002 Sarbanes-Oxley Act, _____________ must certify the effectiveness of the company’s internal controls each year. If they sign off on ineffective controls, they could _______________.
a. CFOs and CEOs; face civil and criminal penalties.
b. CFO; face civil penalties.
c. CEO; get fired.
d. External auditor; face the Audit Committee.
The primary responsibility for overseeing the establishment and administration of internal control rests with
a. The external auditor.
b. The controller.
c. The internal auditor.
d. Senior management.
Source: COSO’s Internal Control Integrated framework
Which of the following are elements included in the control environment?
a. Organizational structure, management philosophy, and planning.
b. Risk assessment, assignment of responsibility, and human resource practices.
c. Competence of personnel, backup facilities, laws, and regulations.
d. Integrity and ethical values, assignment of authority, and human resource policies.
Which of the following fits most directly under the control activities component of the COSO Internal Control framework?
a. Company-level controls dealing with tone at the top.
b. Accounting for shipping documents to ensure that all sales are recorded.
c. Overall methods for assigning authority and responsibility.
d. The control environment.
Controls may be classified according to the function they are intended to perform; which of the following is a detective control?
a. Dual signatures on all disbursements over a specific amount.
b. Recording every transaction on the day it occurs.
c. Monthly bank statement reconciliations.
d. Requiring all members of the internal audit staff to be CPAs.
Controls designed to deter undesirable events from occurring are
a. Preventive controls.
b. Directive controls.
c. Detective controls.
d. Output controls.