CHFP STUDY SET - INTERNAL CONTROL EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS VERIFIED
Internal Control
A process implemented by an entity's board of directors, management, and other
personnel designed to provide reasonable assurance in reaching these objectives:
1. Effectiveness and efficiency of operations
2. Reliability of financial reporting
3. Compliance with applicable laws and regulations.
Five interrelated components of internal control
1. Control Environment
2. Risk Assessment
3. Control Activities
4. Information & Communications
5. Monitoring
Control Environment
* Sets the tone of the organization
* Influences the control consciousness of the people
* Includes integrity, ethical values, competence, attention, mgmt. philosophy, and
direction provided by the board of directors
Risk Assessment
ANSWERS WITH COMPLETE SOLUTIONS VERIFIED
Internal Control
A process implemented by an entity's board of directors, management, and other
personnel designed to provide reasonable assurance in reaching these objectives:
1. Effectiveness and efficiency of operations
2. Reliability of financial reporting
3. Compliance with applicable laws and regulations.
Five interrelated components of internal control
1. Control Environment
2. Risk Assessment
3. Control Activities
4. Information & Communications
5. Monitoring
Control Environment
* Sets the tone of the organization
* Influences the control consciousness of the people
* Includes integrity, ethical values, competence, attention, mgmt. philosophy, and
direction provided by the board of directors
Risk Assessment
