39939371
Description
Flashcards by Richard Kramer, updated 2 months ago
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Created by Richard Kramer
2 months ago
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| Question | Answer |
| Application control | Controls specific to a subsystem or an application to ensure the validity, completeness, and accuracy of the transaction |
| Code of Ethics | A formal expectation on what is considered to be ethical within an organization to promote ethical behavior |
| Committee of Sponsoring Organization (COSO) | Composed of several organizations (AAA, AICPA, FEI, IIA, and IMA); studies the causal factors that lead to fraudulent financial reporting and develops recommendations for public companies, independent auditors, the SEC and other regulators, and educational institutions to improve the quality of financial reporting through internal controls and corporate governance |
| Control objectives for information and related technology | An internationally accepted set of best IT security and control practices for IT management released by the IT Governance Institute (ITGI) |
| Control risk | The threat that errors or irregularities in the underlying transactions will not be prevented, detected, and corrected by the internal control system |
| Corporate governance | A set of processes and policies in managing an organization with sound ethics to safeguard the interests of its stakeholders |
| Corrective controls | Fix problems that have been identified, such as using backup files to recover corrupted data |
| Cost/benefit analysis | Important in determining whether to implement an internal control |
| Detective controls | Find problems when they arise |
| Enterprise risk management (ERM) | A process, affected by the entity’s board of directors, management, and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within the risk appetite, to provide reasonable assurance regarding the achievement of objectives |
| General controls | Pertain to enterprise wide issues such as controls over accessing the network, developing and maintaining applications, and documenting changes of programs |
| Information Technology Infrastructure Library (ITIL) | A set of concepts and practices for IT service management |
| Inherent risk | The risk related to the nature of the business activity itself |
| Input control | Ensure the authorization, entry, and verification of data entering the system |
| International Organization for Standardization (ISO) 2700 series | This series contains a range of individual standards and documents specifically reserved by ISO for information security |
| IT application controls | Activities specific to a subsystem’s or an application’s input, processing, and output |
| IT controls | Involve processes that provide assurance for information and help to mitigate risks associated with the use of technology |
| IT general controls | Enterprise-level controls over IT |
| Output controls | Provide output to authorized people and ensure the output is used properly |
| Manual controls | Mainly manual but could involve the physical use of computing technology |
| Preventive controls | Deter problems before they arise |
| Processing controls | Ensure that data and transactions are processed accurately |
| Public Company Accounting Oversight Board (PCAOB) | Established by SOX to provide independent oversight of public accounting firms |
| Residual risk | The product of inherent risk and control risk (i.e., Residual risk = Inherent risk × Control risk) |
| Risk assessment | The process of identifying and analyzing risks systematically to determine the firm’s risk response and control activities |
| Sarbanes-Oxley Act of 2002 (SOX) | A response to business scandals such as Enron, WorldCom, and Tyco International; requires public companies registered with the SEC and their auditors to annually assess and report on the design and effectiveness of internal control over financial reporting |
| Control environment | Sets tone of firm, influences control consciousness, and establishes the foundation for internal control |
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