BUS 431Exam1 - Exam #1 1) A) Internal Controls can be...

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Exam #1 1) A) Internal Controls can be defined as some form of systematic measures like reviews, checks and balances, methods and procedures that are instituted by an organization in order to accomplish a number of tasks. The tasks usually include: Helping to conduct its business in an orderly and efficient way; protecting their assets and resources; preventing/detecting errors, fraud and/or theft; making sure their accounting data is accurate and complete; providing company information in a reliable and timely manner; making sure that the company’s plans and policies are being enforced and followed in a proper fashion. B) The historical significance of the Treadway Commission is that the commission established an internal control concept model in 1992 that has been adopted by many organizations around the world. The Treadway Commission gave a definition to what they felt internal controls consisted of and how these factors can affect the company and help them to meet goals within a company. This COSO model (Committee of Sponsoring Organizations of the Treadway Commission) has been a popular method for companies to use for internal control guidelines. The Foreign Corrupt Practices Act (1977 and revised in 1988) was created to prevent bribery of foreign government officials by people in the U.S., as well as initiating accounting and record-keeping practices for publicly traded companies in the U.S. The accounting and record-keeping is used to keep all dispositions of company assets to prevent misrepresentation of funds and assets and other illegal activities as well.
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C) Enterprise Risk Management can be defined as the process of planning, organizing, leading, and controlling activities of a company in order to minimize the effects of risk on an organization's capital and earnings. ERM believes that every entity within a company exists to provide some form of value for its stakeholders. The ERM consists of: Internal Environment: The tone of the company, setting a basis for how risk is viewed within the company and how they approach it. Objective Setting: Management objectives defined to provide a guideline for the company’s missions and goals. Event Identification: The risks and opportunities of internal and external events that can affect the company’s objectives. Risk Assessment: The analyzing of risks and how they should be handled
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This note was uploaded on 07/12/2011 for the course BUS 101 taught by Professor Noname during the Spring '11 term at Albany State University.

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BUS 431Exam1 - Exam #1 1) A) Internal Controls can be...

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