MGAD40H3 Chapter 13: Chapter 13 Notes

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yellowwasp29

20 Apr 2011

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Strategic risks are managed primarily by communicating effective boundaries both business conduct and strategic and installing good internal control. Chapter 13 managing strategic risk systems. undesirable levels of risk and performance measurement. Boundary systems are designed to communicate risks to be avoided and to remove any ability to rationalize actions that could expose the firm to. Internal control systems are designed to protect assets and to remove the opportunity for inadvertent error or wilful wrongdoing in transaction processing. To ensure employees engage in the right type of activities, managers must first inspire commitment to a clear set of core values (the beliefs that define. Core values provide guidance about responsibilities to customers, employees, local communities, and stockholders. Managers should never delegate the preparation of missions and credos, they should personally reinforce core values and their importance. In small companies, communication of core values can be accomplished informally, but large companies must formalize this process by articulating and.

Related Questions

1) A properly designed internal control system is a key part of accounting information systems' design, analysis, and performance. True False

2) The use of internal controls provides guaranteed protection against losses due to operating activities. True False

3) Good internal control dictates that a person who controls an asset should also maintain the accounting records for that asset. True False

4) Once a good system of internal control is in place, it rarely needs review. True False

5) Two important limitations of internal control systems are (1) human error or human fraud and (2) cost-benefit. True False

6)The main principles of internal control include which of the following:

Establish responsibilities.

Maintain minimal records.

Use only computerized systems.

Bond all employees.

Require automated sales systems.

7) A good system of internal control:

Urges adherence to prescribed managerial policies.

Insures profitable operations.

Eliminates the need for an audit.

Requires the use of noncomputerized systems.

Is not necessary if the company uses a computerized system.

8) A company's internal control system:

Eliminates the risk of loss.

Monitors and controls business activities.

Eliminates human error.

Eliminates the need for audits.

Is not necessary in large companies.

4)Managers place a high priority on internal control systems because the systems assistmanagers in all of the following except:

A)Protecting assets.

B)Urging adherence to company policies.

C)Promoting efficient operations.

D)Ensuring reliable accounting.

E)Assuring that no loss will occur.

5)A properly designed internal control system:

A)Insures profitable operations.

B)Eliminates the need for an audit.

C)Is not necessary if the company uses a computerized system.

D)Requires the use of non-computerized systems.

E)Lowers the company's risk of loss.

6)A company's internal control system:

A)Eliminates the need for audits.

B)Eliminates the need for managers' certification of controls.

C)Monitors company and employee performance.

D)Eliminates human error.

E)Eliminates the company's risk of loss.

7)The impact of technology on internal controls includes:

A)Elimination of fraud.

B)Elimination of the need to bond employees.

C)Reduced processing errors.

D)Elimination of separation of duties.

E)Elimination of the need for regular audits.

8)Internal control systems are:

A)Required only if a company plans to engage in interstate commerce.

B)Developed by the Internal Revenue Service for all U.S. companies.

C)Required by Sarbanes-Oxley (SOX) to be documented and certified if the

company's stock is traded on an exchange.

D)Developed by the Securities and Exchange Commission for public companies.

E)Developed by the Small Business Administration for non-public companies.

9)Cash equivalents:

A)Include 6-month certificates of deposit.

B)Are short-term, highly liquid investment assets.

C)Include money orders.

D)Include checking accounts.

E)Are recorded in petty cash.

10)Cash equivalents meet all of the following criteria except:

A)Include short-term investments purchased within 3 months of their maturity

dates.

B)Are readily convertible to a known cash amount.

C)Have a market value that is not sensitive to interest rate changes.

D)Include short-term U.S. treasury bills.

E)Are more liquid than cash.

azureporcupine205

Seanâs company employs about 100 people, all of whom work in the same building. The companyâs structure is hierarchical; the employees consist of about 70 billing clerks (who process bills that need to be sent from the medical clients to their patients), about 15 nonmanagerial professionals (in IT, accounting, sales, and customer relations), and about 15 managers/executives. Which is least likely to be true about his companyâs communication?

1)For their internal communications, all employees use a friendly, casual tone.

2)The billing clerks do not send many communications to the executives or upper-level managers.

3)The nonmanagerial professionals tend to communicate more with each other and their managers than they do with the billing clerks.

4)There are written guidelines for many of the companyâs procedures.

5)The billing clerksâ external communications follow standardized formats.

salmonhornet160

MGAD40H3 Chapter 13: Chapter 13 Notes

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