DISCUSSION QUESTIONS:
1. Define and describe what is meant by internal control.
2. Which internal controls do you believe are the most important, detective or preventative? In the 1970's many Japanese companies were implementing quality control programs. Companies would attempt to learn where breakdowns were occurring and adjust production to eliminate quality problems. American car makers had quality controls programs also. Cars would be examined after the fact and any found defects fixed. So which controls would be more effective preventative or detective?
3. Our call center representatives were issuing adjustments to customer bills for situations not allowed. They also had a limit on the number of adjustments given to a particular customer. Which is better having a control searching for situations when adjustments were over the authorized amounts? Or a control where the representatives is prevented from making adjustments over the set amount?
4. In my words, companies should perform a risk assessment and determine what their objectives are along with what the controls are that might prevent the business unit from meeting their objectives. Controls help to mitigate the risks.
What are the five components of internal controls per COSO? Which one do you believe is the most important?
5. Private and not for profit companies are not required to adhere to Sarbanes Oxley. Yet many public entities such as public universities and hospitals have implemented Sarbanes Oxley controls, and these controls come with a price tag. Why would an entities comply with Sarbanes Oxley when not required?
6. Distinguish between the responsibilities of management and auditors regarding an entity's internal control. Who do you believe benefits more from the new rules and regulations regarding internal controls, the auditors or management?
7. Define and explain the differences among several kinds of employee frauds that might occur at an audit client.
8. Identify and explain the three conditions (i.e., the fraud triangle) that often exist when a fraud occurs
9. Describe techniques that can be used to prevent employee fraud.
ANSWER EACH QUESTION IN 200 OR MORE WORDS.
USE CITATIONS AND REFERENCES
USE APA GUIDELINES PLEASE.