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    3 - Corp Gov - Q&A

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    Hyc Conopio
    The document discusses internal control and corporate governance. It defines internal control and explains its key components and objectives based on the COSO framework. These include control environment, risk assessment, control activities, information and communication, and monitoring activities. The document also discusses management control systems, internal control over financial reporting, the roles of auditors, and the importance of complying with the Sarbanes-Oxley Act, specifically Section 404 on management assessment of internal controls.

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    3 - Corp Gov - Q&A

    Uploaded by

    Hyc Conopio
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    The document discusses internal control and corporate governance. It defines internal control and explains its key components and objectives based on the COSO framework. These include control environment, risk assessment, control activities, information and communication, and monitoring activities. The document also discusses management control systems, internal control over financial reporting, the roles of auditors, and the importance of complying with the Sarbanes-Oxley Act, specifically Section 404 on management assessment of internal controls.

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    The document discusses internal control and corporate governance. It defines internal control and explains its key components and objectives based on the COSO framework. These include control environment, risk assessment, control activities, information and communication, and monitoring activities. The document also discusses management control systems, internal control over financial reporting, the roles of auditors, and the importance of complying with the Sarbanes-Oxley Act, specifically Section 404 on management assessment of internal controls.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    6 views4 pages

    3 - Corp Gov - Q&A

    Uploaded by

    Hyc Conopio
    The document discusses internal control and corporate governance. It defines internal control and explains its key components and objectives based on the COSO framework. These include control environment, risk assessment, control activities, information and communication, and monitoring activities. The document also discusses management control systems, internal control over financial reporting, the roles of auditors, and the importance of complying with the Sarbanes-Oxley Act, specifically Section 404 on management assessment of internal controls.

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    © All Rights Reserved
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    of 4

    Group 4: Internal Control and Review

    Question and Answer Portion:

    1. What is internal control?


    - Internal controls are the mechanisms, rules, and procedures implemented
    by a company to ensure the integrity of financial and accounting
    information, promote accountability, and prevent fraud.
    2. What is the relation between internal control and management control
    systems in corporate governance?
    - Internal control and management control systems complement each other
    despite their different roles in the organization since both of them aim
    toward the same goal which is to ensure proper company management
    and reduce possible risks.
    3. What are the key components of management control systems?
    - Clear Managerial Assignments
    - Bureaucratic Controls
    - Financial Controls
    - Quality Controls
    4. What are the objectives of Internal Control?
    - Effective and efficient operations
    - Reliability of financial and non-financial reporting
    - Compliance with applicable laws and regulations
    5. According to the COSO Framework, what are the components of internal
    control?
    - Control environment
    - Risk assessment
    - Control activities
    - Information and communication
    - Monitoring Activities
    6. How does internal control affect corporate governance?
    - The role of internal control in corporate governance is to ensure that the
    organization's objectives are achieved, and its risks are managed.
    7. What is an audit?
    - An audit is a systematic examination or assessment of an organization's
    internal control systems, processes, and procedures.
    8. What does compliance mean in corporate governance?
    - It refers to the process in which companies demonstrate that they have
    conformed to specific requirements in laws, regulations, contracts,
    strategies, and policies.
    9. What are the 3 objectives and purposes of internal control over financial
    reporting?
    - Pertains to the maintenance of records that in reasonable detail accurately
    and fairly reflect the transactions and dispositions of the assets of the
    registrant
    - Provides reasonable assurance that transactions are recorded as
    necessary to permit the preparation of financial statements in accordance
    with GAAP.
    - Provides reasonable assurance regarding the prevention or timely
    detection of unauthorized acquisition, use, or disposition of the registrant’s
    assets that could have a material effect on the financial statements.
    10. How do you define Internal control over financial reporting?
    - It is a process consisting of policies and control procedures to assess
    financial statement risk and provide reasonable assurance that a company
    prepares reliable financial statements. Detailed, fair, and accurate financial
    records with receipts for transactions are maintained by employees and
    approved by management for corporate governance.
    11. What are the roles and responsibilities of independent auditors in internal
    control and reporting?
    - Independent auditors, usually external to the organization, inspect a
    company's financial records and provide an impartial evaluation of the
    financial statements. Their primary role is to express an unbiased opinion
    on the honesty and fairness of the company's accounting records.
    12. Name 3 users of Management Information Systems and how they utilize
    them.
    - Operational staff need access to the data collected by MIS to ensure
    they’re carrying out their duties effectively.
    - The finance department uses MIS to identify patterns and trends in
    organizational data to make recommendations for process improvements
    and optimizations.
    - Marketing uses MIS to track customer behavior, preferences, and
    purchases to improve marketing strategies and campaigns.
    13. What are the types of management information systems?
    - Transaction processing systems
    - Operations information systems
    - Decision support systems
    - Expert systems
    14. Why is management information important in audit and internal control?
    - In audits, it serves as evidence supporting financial statements, aids in
    risk assessment, and facilitates communication with management.
    - In internal control, it plays a crucial role in system design, monitoring,
    decision support, and compliance.
    - All in all, reliable and accurate management information is fundamental to
    effective decision-making, risk management, and ensuring the integrity of
    financial reporting in both contexts.
    15. What is the difference between the control environment and the control
    activities components of the COSO Framework?
    -While the control environment sets the tone for internal control, emphasizing the
    importance of control consciousness throughout the organization, control
    activities are the actual and specific mechanisms put in place to ensure that
    objectives are achieved and risks are managed effectively.
    16. What are the steps involved in Risk Assessment?
    ● Identification of Risks
    ● Analysis of Risks
    ● Risk Response Strategies
    ● Integration with Objectives
    ● Ongoing Monitoring and Review
    17. Why is external oversight an important aspect of the monitoring
    component of the COSO Framework?
    -External oversight is crucial within the monitoring component of the COSO
    Framework because it provides an independent perspective on the effectiveness
    of internal controls. This independent review enhances objectivity, ensures
    accountability, and strengthens the overall integrity of the organization's control
    environment. External oversight helps identify potential weaknesses or
    deficiencies that may not be evident to internal stakeholders, ultimately
    improving risk management and governance practices.

    18. What is the purpose of the Guide to the Sarbanes Oxley Act: Internal
    Control Reporting Requirements? Why is it important to properly report on
    internal controls?
    - The purpose of the Guide to the Sarbanes-Oxley Act: Internal Control Reporting
    Requirements is to help companies understand and comply with the
    requirements of the Sarbanes-Oxley Act (SOX) related to internal control
    reporting. It provides clear explanations and guidelines to assist organizations in
    establishing effective internal control systems and accurately reporting on their
    financial processes. Proper reporting on internal controls is essential for legal
    compliance, investor confidence, risk management, corporate governance,
    stakeholder trust, and strategic planning, which are vital for sustainable business
    success.
    19. What should happen if organizations do not comply with the requirements
    set by the SOX Internal control reporting requirements?
    -If organizations fail to comply with the requirements set by the Sarbanes-Oxley
    Act (SOX) Internal Control Reporting Requirements, they may face severe
    consequences. These consequences can include financial penalties, legal
    liabilities, loss of investor trust, reputational damage, and regulatory sanctions.

    20. What is Section 404 - Management Assessment of Internal Controls of the


    Guide and why is it so important?
    -Section 404 of the guide requires management to assess and report on the
    effectiveness of internal control over financial reporting (ICFR). Section 404 is
    crucial because it helps ensure the reliability of financial reporting, enhances
    investor confidence, mitigates risks, strengthens corporate governance, and
    ensures regulatory compliance. Compliance with Section 404 fosters
    transparency, accountability, and integrity within organizations, ultimately
    contributing to the stability and trustworthiness of the financial markets.

    List of Respondents:
    1. Noreine Bagano
    2. Fenna Lou Garrido
    3. Mariane Mildred Bontigao
    4. Gabrielle Vapor
    5. Silvan Fuentes
    6. Joshua Ray Aliwanag
    7. Denzel Uy
    8. Karylle Go
    9. Andrea Grace Adana
    10. Jay Mijares
    11. Katherine Alyanna Sumalinog
    12. Gwyneth Marie Jakosalem
    13. Kasandra Gail Bureros
    14. Philip Muega
    15. Ricamela Von Ocampo
    16. Alyana Caye Pino
    17. Jiezriel Milan Labitad
    18. Stella Mariz Cano
    19. Angelica Hope Tadena
    20. Elyza Beth Demaisip

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