Principles of Financial Accounting · free preview
Internal Controls and Their Purpose
Internal controls are the policies and procedures that safeguard assets, ensure reliable reporting, promote operational efficiency, and keep the organization compliant with laws, anchored in the framework of control environment, risk assessment, control activities, information, and monitoring.
1. What internal control means
What internal control means
2. The framework in five components
The framework in five components
3. Why every employee owns controls
Why every employee owns controls
4. Controls and the accounting cycle
Controls and the accounting cycle
5. Purpose of internal control
Which list captures the purposes of internal control?
6. Foundation component
Which component of internal control is described as the foundation of the system?
7. Reasonable assurance
Why is internal control said to provide only reasonable assurance rather than absolute assurance?
8. Three-way match
What three documents must match before a well-controlled company pays a supplier invoice?
9. Five component count
How many components does the COSO internal control framework have? Give the number only.
10. Control over cash arithmetic
Give the two-word name of the monthly control that compares the company's cash records with the bank's records and explains every difference.
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