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Factors protecting the independence of internal auditor: 2 начать обучение
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Reporting to audit committee. Independency of executive management. | Audit committee approve appointment and termination of chief internal auditor (CIA).
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IFA SS начать обучение
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Intimidation | Familiarity | Advocacy | Self-review | Self-interest
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Intimidation threat examples: 2 начать обучение
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Litigation threat | Dominant personality of client director attempting to influence decisions
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Familiarity threat examples: 2 начать обучение
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Long association with a client | acceptance of gifts or preferential treatment (significant value)
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Advocacy threat examples: 2 начать обучение
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Acting as an advocate on behalf of a client | Promoting shares in a listed audit client
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Self-review threat examples: 2 начать обучение
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Auditor in position of reviewing work they have been responsible for (like tax services) | Recent employment and review own work
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Self-interest threat examples: 2 начать обучение
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Undue dependence of fee income from one client. | Direct financial interest. Close personal or business relationship.
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The make-up of the audit committee: 2 начать обучение
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AC consists entirely of NEDs | one with recent financial experience.
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Most of the board objectives relating to internal controls will be delegated to the... начать обучение
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Who is responsible for oversight of company relation with external auditors? начать обучение
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начать обучение
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A method of gauging humans’ dependence on natural resources. It calculates how much of the environment is needed to sustain a particular lifestyle. The ecological footprint can be calculated for different populations, including individuals, cities, regions, countries, or the entire planet. You can even calculate your personal ecological footprint.
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2 начать обучение
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An unrealised future loss arising from a present action or inaction. | Risks are the opportunities and threats associated with uncertain future events.
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Why companies incur a general risk? 2 начать обучение
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To gain competitive advantage. | To increase financial return.
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Why companies manage a downside and upside risk? 2 начать обучение
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Downside risks managed to identify new risks and changes in existing risks. | Upside risks identified to make best use of opportunities.
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definition начать обучение
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Process of reducing adverse consequences by reducing likelihood of event or its impact.
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Who is responsible for risk management system? начать обучение
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As Low as Reasonably Practicable graphics avaiable
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As Low as Reasonably Practicable principle: 2 начать обучение
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Express a point at which the cost of additional risk reduction would be grossly disproportionate to the benefits achieved. | Usually applied to safety critical systems; for example an oil rig.
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Strategic risks examples: 2 начать обучение
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Not enhancing old products. | Producing ‘incorrect’ new products
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Operational risks arising from...? начать обучение
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_arising from business operations.
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начать обучение
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Strategic risk that threaten the health and survival of the whole business.
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начать обучение
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Use of financial instruments to improve accounts.
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начать обучение
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Company appears to act incorrectly.
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начать обучение
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Inability obtain funds required.
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начать обучение
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Risks that vary because of the presence of another risk or where two risks have a common cause. Risk correlation is a particular example of particular risk.
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начать обучение
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![Risk heat map на английском языке](https://static.vocapp.com/img/G/R/g/B-GkbOM1HDgVs9sWg.jpg) |
A tool used to present the results of a risk assessment process visually and in a meaningful and concise way. | A common understanding of the risk appetite | A common language for assigning probabilities and potential impacts.
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Main role of the Board in risk management 3 начать обучение
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Considering risk at strategic level | and defining organisation’s appetite | and approach to risk.
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[Framework for Board consideration of risk] начать обучение
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How much risk the business will accept.
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[Framework for Board consideration of risk] начать обучение
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Maximum risk business can accept.
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[Framework for Board consideration of risk] начать обучение
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Risk that cannot be managed.
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2 начать обучение
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Member of risk management committee | who reports direct to the board.
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Primary role of risk manager начать обучение
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Implementation of risk management policies.
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Aim of embedding risk management: начать обучение
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To ensure that it is ‘part of the way we do business’. 2 levels: Embedding risk in systems and Embedding risk in culture.
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Levels of embedding risk. 2 начать обучение
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Embedding risk in systems: 3 начать обучение
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Ensuring risk management is included within control systems of an organisation. | Not a separate system – part of overall control system. | May be statutory requirements (USA) or code of practice.
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Process of embedding risk: 4 steps начать обучение
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Identify controls already operating. | Monitor controls to ensure they work. | Improve controls as required. | Document the new controls impact.
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Embedding risk in culture outline. начать обучение
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Risk management being considered ‘normal’ for organisation therefore all employees follow risk management policies. | Risk management culture stars at ‘top of company’ – provides better risk management. Risk awareness is a capability of organisation to be able to recognise risks when they arise, from whatever source they may come
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начать обучение
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Risk retained within organisation. Acceptance of risk. from TARA
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How to reduce risk? Where it works the best? 2 начать обучение
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By diversifying operations (Make different products or invest in different countries). | Works best where risks are negatively correlated.
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3 начать обучение
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Risk auditing | Carried out by internal or external audit teams. | May be obligatory (e.g. Sarbanes-Oxley Act).
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Initial coin offering (ICO) - Software value tokens Type of crowdfounding начать обучение
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The company wanting to raise finance creates its own cryptocurrency (like a personalised Bitcoin). These are then sold to investors, who typically pay in another cryptocurrency. The tokens are not like shares and do not give control or voting rights, but the investors hope that the tokens will appreciate in value if the company prospers and the tokens can then be sold at a profit.
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Which tools are used in portfolio analysis? 2 начать обучение
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BCG matrix and BCG public sector matrix. | Ashridge portfolio display.
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2 начать обучение
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A body of theory and knowledge | which is used the support the public interest.
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Profession characteristic 3 начать обучение
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Body of theory and skills. | Adherence to common code conduct. | Acceptance of duty to society.
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начать обучение
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Taking action to support the public interest. Acting professionally.
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начать обучение
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Nothing negative aspects of accounting and taking action to remove those aspects e.g. legislation post Enron.
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Proactive professionalism начать обучение
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Seeking out new ways to support the public interest, such self-imposed codes of conduct.
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начать обучение
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The welfare or well-being of the general public; commonwealth. As opposed to what serves the interest of individual members of society or specific sectional interest groups.
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Accountants in the public interest influence: 3 начать обучение
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Influence on organisations. | Influence in society. | Influence on distribution of power and wealth. 1. Services provision. | 2. Act in public interest. | 3. Use of specialist.
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Ethical codes confirm that that acting against the public interest is? начать обучение
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_is not appropriate for accountant. When considering whether to disclose information or not the accountant will need to evaluate each situation on its merits.
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Corporate code of ethics: начать обучение
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Application of ethical values to business behaviour.
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How business ethics affect shareholders? начать обучение
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Expect fair and proper return on their investment. Company should provide this return and information on how shareholders' investment managed.
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How business ethics affect suppliers? начать обучение
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Suppliers attempt to provide quality goods on time. Company should pay invoices promptly, select suppliers on known criteria, such as ‘fair trade’ principles.
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How business ethics affect wider community? начать обучение
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Company affects society as a whole. CSR report explains how company treats wider community.
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How ethics affect business values? начать обучение
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Mission statements mention products and services provided financial objectives and also role of business in society.
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How business ethics affect employees? начать обучение
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Company recognises employee rights in areas such as working conditions, training, health and safety.
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How business ethics affect customer relations? начать обучение
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Company has responsibility to produce quality goods and services at reasonable price.
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Ethic Conceptual framework explains how... начать обучение
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how ‘spirit’ of principles applied.
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Ethic Application details applied to... начать обучение
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... to specific situations.
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[Fundamental ethical principles] начать обучение
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This means that members should be honest, straightforward. If they see something is amiss, they should say so; they shouldn’t try to conceal it; they shouldn’t ‘turn a blind eye’; they shouldn’t try to be ambiguous, they should state things plainly.
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[Fundamental ethical principles] начать обучение
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They must keep themselves up-to-date with legislation and recent developments. They shouldn’t take on work which they are not qualified for or for which they have no skills. They must be diligent, they must be careful.
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[Fundamental ethical principles] начать обучение
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Members, have access to information which is highly confidential and which is price sensitive. That information must be held confidentially. Members should not disclose confidential information unless they have a legal or professional duty to do so. An example of a legal duty to disclose information can arise if a member thinks that a client or the person they are working for is involved in money laundering.
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[Fundamental ethical principles] начать обучение
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They should comply with the law | and they should avoid any actions which discredit the profession. So, for example, when they are trying to advertise their services they shouldn’t say that other members are bad or poor. They should confine themselves to promoting what they are good at; they shouldn’t rubbish other professionals.
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[Fundamental ethical principles] начать обучение
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Members should be influenced by the facts and the facts only. They must avoid bias, conflict of interest and undue influence.
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Benefits of corporate and professional code of ethics. 3 начать обучение
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Provide framework for conflict resolution. | Provides guidelines for similar ethical disputes and methods of resolution. | Provides boundaries across which it is ethically incorrect to pass.
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Drawbacks of corporate and professional code of ethics. начать обучение
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It is only a code – may not fit the precise ethical issue. | Can be interpreted in different ways which may appear ethically incorrect to two different people. | May be no clear or effective punishment for breaching the code.
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начать обучение
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Situation where person tempted not to follow code of ethics.
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Types of safeguards for ethical threats. Created by... 3 начать обучение
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Profession. | Work environment. | Individual
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Safeguards for ethical threats created by profession. 4 начать обучение
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Education and training | CPD | Monitoring of work. | Disciplinary proceedings
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Safeguards for ethical threats created by work environment: 4 начать обучение
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IC systems. | Review procedures. | Codes of ethics. | Disciplinary procedures.
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Safeguards for ethical threats created by Individuals. 4 начать обучение
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Compliance with standards. | Mentoring. | Recording contentious issues. | Assistance from professional body.
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2 начать обучение
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Excessive ‘hospitality’. | Facilitation payments.
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Corrupting offences by UK Bribery Act (2010). 4 начать обучение
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Offering, promising or giving bribe. | Requesting agreeing to receive or accepting a bribe. | Bribing a foreign public official. | A corporate offence of failing to prevent bribery.
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Obtain detail on ethical conflict: 5 начать обучение
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Relevant facts. | Ethical issues involved. | Relevant fundamental principles. | Established internal procedures. | Alternative courses of action.
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Decide action on ethical conflict: 5 начать обучение
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Consider consequences of each course of action. | Consult with those charged with governance. | Consult with appropriate persons in firm. | Advice from professional institute. | Consider withdraw from assignment.
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Ability to make ethical decision depends on: 2 начать обучение
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Issue-related factors. | Context-related factors. How important decision is to decision-maker – factors affect moral intensity and moral framing. || How factors relating to issue are viewed.
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[Factors affecting moral intensity] начать обучение
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How many people affected by action? Fewer people increases moral intensity.
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[Factors affecting moral intensity] начать обучение
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Likelihood harm – benefits occurs. More likelihood increases moral intensity.
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[Factors affecting moral intensity] начать обучение
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Nearness of decision maker to people affected by decision. ‘Closer’ relationship increases moral intensity.
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[Factors affecting moral intensity] начать обучение
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How soon effects of decision occur? Short time increases moral intensity.
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[Factors affecting moral intensity] начать обучение
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Extent of harm caused by poor advice. More harm increases moral intensity.
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[Factors affecting moral intensity] начать обучение
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Extent of agreement ethics of an action. More agreement increases moral intensity.
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[Ethical Key contextual factors] начать обучение
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Cultures have different ideas of ‘ethics’.
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[Ethical Key contextual factors] начать обучение
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Provides ethical context e.g. accountants normally behave ethically.
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[Ethical Key contextual factors] начать обучение
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Follow rules – not normally consider ethics of decisions made.
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[Ethical Key contextual factors] начать обучение
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Rewards based on achievement may encourage unethical decisions.
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[Ethical Key contextual factors] начать обучение
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Senior manager unethical means junior likely to be also.
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[Ethical Key contextual factors] начать обучение
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Follow what peer-group think is ethical.
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This is the length of time between the present and the onset of the consequences of a moral decision. When the effect is in the near future, it is considered to have a higher degree of moral intensity, and so is more likely to prevent unethical behavior. The length of time that elapses from making a decision to experiencing the consequences of that decision.
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Contract that outlines the terms and conditions between parties involved, and the responsibility of each. It generally involve an independent third party, an escrow agent, who holds the asset until the specified conditions of the contract are met. Escrow agreements are commonly used in real estate transactions.
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Boundaryless organization. начать обучение
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It is an organization that is not defined by, or limited to, the horizontal, vertical, or external boundaries imposed by a predefined structure. No external barriers between the company and its customers and suppliers.
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начать обучение
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he ability of a computer to respond to a user's input. E.g. writing a comment on Amazon.
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Reporting to shareholders characteristic: 3 начать обучение
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Chair of AC available at AGM for shareholder questions. | Shareholders right to know if ICs are sufficient to safeguard their investment. | To provide shareholders with necessary information, Board producing comprehensive annual review on IC systems. comprehensive annual review on IC systems.
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Strategic risks identification. Risks arising from consequences of strategic decisions. Identified and assessed at...? начать обучение
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Operational risk are identified at...? начать обучение
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Operational risks examples: 2 начать обучение
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include fraud | quality control
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Strategic risks are managed by ...... strategy. начать обучение
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by risk management strategy.
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Operational risks are managed by ...... systems.? начать обучение
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by internal control systems.
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Three stages of environmental audit. 3 начать обучение
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Establishing the metrics. | Measuring actual performance against the metrics. | Reporting the levels of variances.
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Rational model components. начать обучение
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Company mission | and Stakeholders. Mendelow’s matrix - the only one stakeholder model.
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