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Which of the following describes the risk assessment component of internal control?
 
(A) A company must identify its risk and take the necessary steps to minimize it.
 
(B) Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate.
 
(C) Risk assessment is designed to ensure that the business's goals are achieved.
 
(D) Risk assessment is the tone at the top of the business.

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Nestor Rutherford
Nestor RutherfordLv2
12 Mar 2020

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Amazon.com, Inc.

We have audited Amazon.com, Inc.’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). Amazon.com, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Amazon.com, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Amazon.com, Inc. as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2013 of Amazon.com, Inc. and our report dated January 30, 2014 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Seattle, Washington

January 30, 2014

Please answer the following:

review the audit report prepared by the auditors. Let us know the name of the company, the name of the CPA firm that prepared the audit report and tell us the type of opinion that was provided. Also, discuss the role of the audit firm in the audit process.

Solutions for E-Banking Security Holes:

Digital Security of software systems in Banks is very important to protect sensitive bank information, employee’s identity and customer’s privacy, also to avoid many legal problems. Strong security solutions are very important especially with the presence of online banking, banking software and workflow systems. The extensive usage of software systems in banks without strong security could lead to many legal problems. Normal security systems and policies do not stop internal or external hacking, and do not provide a legal way to proof any made transaction.

Online banking accounts are frequently targeted by cybercriminals. Security issues remain a major concern for customers and corporations alike. As a result, banks need to implement adequate security measures to protect themselves and their customer base.

Saudi Arabian Monetary Agency (SAMA) suggested the following solutions that aim to increase the level of security for online banking:

1- Identity Authentication

Banks should use appropriate measures in order to authenticate the identity of customers. It is important for any bank to check that each online transaction or access request is legitimate to ensure the safety of online banking. Banks therefore have to use reliable methods for verifying the identity and authorisation of new and existing customers. Showing the customers what has been done to secure them, makes them feel the system is secure and that there money are protected.

2- Segregation of Duties

Banks should promote adequate segregation of duties within e-banking systems, databases and application, which is critical for their security and soundness. Therefore, Banks are required to set up sophisticated internal control designed specially to reduce fraud risk in operational processes and systems and to ensure that transactions and equipment are properly authorised, recorded and safeguarded.

The classification of duties should cover authorization, custody, record keeping and reconciliation.

3- Protect Data Integrity

Data integrity of transactions, records and information are essential for any bank to be protected. If the bank did not give special attention to that, it may face financial losses as well as legal and reputational risk. In addition, banks should arrange and represent proper organisational, procedural and technical methods, which ensure that the integrity of financial and transactional data is maintained. Financial data recording should be stored securely, retrievable for inquiry or reporting, safeguarded against improper alteration, and mostly reflect the actual values involved.

4- Regular Update and Audit

Feasible updates of the online banking system would reassurance that the authentication platform is stay one step ahead of hackers and decrease there chances to stole the data and also minimize the security holes. Banks should ensure that the internal control system is adapted to e-banking services and that clear audit trails are maintained. Added to that, internal controls should be independently auditable by external agencies. Audit trail should:

Give adequate proof to show the transaction stream, from start to finish, and any accompanying control/procedural execution.

Be sufficient to fulfill the rules of the courts under which they could be used.

5- Preserve the Confidentiality

The advent of online banking introduces extra security challenges for banks since it increases the exposure that information transmitted over the public network or stored in databases may be accessible by unauthorised or inappropriate parties. Also, expand the use of service providers may uncover essential data of banks to other parties. So, the key data of the banks must remain private. Any abuse could result in exposing the bank to high impact reputation and legal risk. The protection of confidentiality should be commensurate with the impact of the risk of unauthorised exposure:

Confidentiality should be maintained by use of access controls and encryption.

Cryptographic techniques should be based on recognized algorithms that have not been disputed in their strength or use.

Access should only be permitted based on the “need to know” principle.

_______________________________________________________________

I think the best solution is number 5 but i need more information about :

Given what you learned about E-Banking Security Holes ?

what do you think would be the best solution to the problem?

Why you selecation this ?

What are the possible impacts?

Question 8

Which of the following is NOT one of the steps taken in the financial planning process?
Answer Forecast the funds that will be generated internally. If internal funds are insufficient to cover the required new investment, then identify sources from which the required external capital can be raised.
Monitor operations after implementing the plan to spot any deviations and then take corrective actions.
Determine the amount of capital that will be needed to support the plan.
Develop a set of forecasted financial statements under alternative versions of the operating plan in order to analyze the effects of different operating procedures on projected profits and financial ratios.
Consult with key competitors about the optimal set of prices to charge, i.e., the prices that will maximize profits for our firm and its competitors.
.2 points
Question 9

Which of the following statements is CORRECT?
Answer Since accounts payable and accrued liabilities must eventually be paid off, as these accounts increase, AFN as calculated by the AFN equation must also increase.
Suppose a firm is operating its fixed assets at below 100% of capacity, but it has no excess current assets. Based on the AFN equation, its AFN will be larger than if it had been operating with excess capacity in both fixed and current assets.
If a firm retains all of its earnings, then it cannot require any additional funds to support sales growth.
Additional funds needed (AFN) are typically raised using a combination of notes payable, long-term debt, and common stock. Such funds are non-spontaneous in the sense that they require explicit financing decisions to obtain them.
If a firm has a positive free cash flow, then it must have either a zero or a negative AFN.
.2 points
Question 10

Spontaneous funds are generally defined as follows:
Answer Assets required per dollar of sales.
A forecasting approach in which the forecasted percentage of sales for each item is held constant.
Funds that a firm must raise externally through short-term or long-term borrowing and/or by selling new common or preferred stock.
Funds that arise out of normal business operations from its suppliers, employees, and the government, and they include immediate increases in accounts payable, accrued wages, and accrued taxes.
The amount of cash raised in a given year minus the amount of cash needed to finance the additional capital expenditures and working capital needed to support the firm

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