BEC CPA Exam Questions & Answers 2023/2024
COSO Framework assists Management and the Board of Directors by: - ANSWER-Effectively applying Internal Control
Determining the requirements of an effective system
Allow judgement and flexibility in the design of I/C
Identify and analyze risks, and d...
BEC CPA Exam Questions & Answers
2023/2024
COSO Framework assists Management and the Board of Directors by: - ANSWER-Effectively applying
Internal Control
Determining the requirements of an effective system
Allow judgement and flexibility in the design of I/C
Identify and analyze risks, and develop effective responses
Eliminate redundant, ineffective, or inefficient controls
Extend I/C application beyond financial reporting
Three Objective of COSO Framework - ANSWER-Operations, Reporting, Compliance Objectives
Operations Objective - ANSWER-The effectiveness and efficiency of an entity's operations. Include
operational and financial performance goals, as well as safeguarding assets
Reporting Objective - ANSWER-Reliability, timeliness, and transparency of an entity's external and
internal financial and non-financial reporting
Financial Reporting Objective - ANSWER-- Make sure financial statements are reported fairly in
accordance with GAAP
- Present relevant and material information
Financial Reporting Risks - ANSWER-- Risk that financial statements are not in accordance with GAAP
Fraud Risk - ANSWER-- Represents risk of material misstatement as a result of fraud
Compliance Objective - ANSWER-Entity is adhering to all applicable laws and regulations
COSO Components of I/C - ANSWER-Control Environment
, Risk Assessment
Information and Communication
Monitoring
Existing Control Activities
COSO Component - Control Environment - ANSWER-Processes, structures, and standards that provide
the foundation for an entity to establish a system of I/C.
Established through "tone at the top"
-Commit to ethics/integrity
-Board independence/oversight
-Organizational structure
-Commit to competence
-Accountability
COSO Component - Risk Assessment - ANSWER-Entity's identification and analysis of risks
-Specify Objectives --> CREATES OBJECTIVES
-Identify/Analyze risks
-Consider potential fraud
-Identify/assess changes
COSO Component - Information and Communication - ANSWER-Support identification, capture, and
exchange of information in a timely/useful manner.
-Obtain and Use info
-Internal Communication
-External Communication
Obtain and Use information - ANSWER-Entity obtains/generates or and uses relevant, high quality
information to support function of I/C
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