Question

1. COSO’s Internal Control Model has five components and 17 principles. Which of the following is(are) principle(s) of the control environment component? (Check all that apply.)

A.A commitment to attract, develop, and retain competent individuals in alignment with objectives

B. Considering the potential of fraud

C. Selecting, developing, and performing ongoing or separate evaluations of the components of internal control

D. Holding individuals accountable for their internal control responsibilities in pursuit of objectives

E. Commitment to integrity and ethics

2. which of the following statements is true with respect to a company’s control environment? (Check all that apply.)

	A.	One of the greatest control strengths is the dishonesty of employees; one of the greatest control weaknesses is the honesty of employees.
	B.	Management should assign authority and responsibility for goals and objectives to departments and individuals and hold them accountable for achieving them.
	C.	An overly complex or unclear organizational structure is not an indication of possible serious problems in an organization.
	D.	An involved board of directors represents shareholders and provides an independent review of management that acts as a check and balance on their actions.

3. Which of the following are true statements? (Check all that apply.)

	A.	Virtually all calls to fraud hotlines are worthy of investigation.
	B.	Neural networks and other programs with learning capabilities are still not able to accurately identify fraud.
	C.	Fraudsters follow distinct patterns and leave clues behind that can be discovered by fraud detection software.
	D.	People witnessing fraudulent behavior are eager and willing to report fraud perpetrators.
	E.	Some whistle-blowers have been ostracized, persecuted, or suffered damage to their careers.

Answer 1

COSO - The committee of sponsoring organisations of the treadway commission. It has 5 components and 17 principles.

The very first component relates go controlling environment which has 5 principles in it as stated below in brief

1. Demonstration of integrity and ethical values

2. Exercise oversight responsibility

3. Establish structure, authority and responsibility

4. Demonstrates commitment to competence

5. Enforce accountability

So on the basis of above principles the answers to the questions are as follows

Which of the following is(are) principle(s) of the control environment component? (Check all that apply.)

A.A commitment to attract, develop, and retain competent individuals in alignment with objectives

B. Considering the potential of fraud

C. Selecting, developing, and performing ongoing or separate evaluations of the components of internal control

D. Holding individuals accountable for their internal control responsibilities in pursuit of objectives

E. Commitment to integrity and ethics

In this question- except B. Considering the potential of fraud , all are the principles of control environment.

Which of the following statements is true with respect to a company’s control environment? (Check all that apply.)

A.

One of the greatest control strengths is the dishonesty of employees; one of the greatest control weaknesses is the honesty of employees.

B.

Management should assign authority and responsibility for goals and objectives to departments and individuals and hold them accountable for achieving them.

C.

An overly complex or unclear organizational structure is not an indication of possible serious problems in an organization.

D.

An involved board of directors represents shareholders and provides an independent review of management that acts as a check and balance on their actions.

For the above question. Statement B and D are true with respect to A company's control environment.

Which of the following are true statements? (Check all that apply.)

A.

Virtually all calls to fraud hotlines are worthy of investigation.

B.

Neural networks and other programs with learning capabilities are still not able to accurately identify fraud.

C.

Fraudsters follow distinct patterns and leave clues behind that can be discovered by fraud detection software.

D.

People witnessing fraudulent behavior are eager and willing to report fraud perpetrators.

E.

Some whistle-blowers have been ostracized, persecuted, or damage to their careers.

Statement B, C, E are true.

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