1. Match the Term (1 to 8) with the correct description (a to h)

a. An agency of Congress responsible for investigating how the federal government spends taxpayer money; responsible accepted government auditing standards (GAGAS)

b. Outlines the components, principles, and factors necessary for an organization to effectively manage its risks through the implementation of internal control

c. Provide a system of rules and principles that prescribe the format and content of financial statements

d. A process, effected by an entity's board of directors, management and other personnel, applied in a strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives

e. An "independent, objective assurance and consulting activity designed to add value and improve an organization's operations

f. Addresses how specific duties related to risk and control could be assigned and coordinated within an organization, regardless of its size or complexity

g. Used to spot the emergence of a corporate environment and culture susceptible and management abuse

h. Signals the adaptation of principles and practices that allow investors and corporations to increasingly operate on a basis of trust across national borders

1. COSO Internal Control Framework

2. Enterprise Risk Management

3. Red Flags

4. Three Lines of Defense

5. Internal Auditing

6. GAO

7. Accounting Standards

8. Global Convergence

2. The company's board of directors is ultimately responsible for the company's risk management and therefore must understand the risk facing the company.

True or False

3. In the Three Lines of Defense Model, the board of directors is accountable for the selection, development, and evaluation of the system of internal control.

True or False

4. The AICPA regulates auditors of publicly-held entities and maintains auditing standards applicable to their audits.

True or False

5. The board chairman should participate in major company, by being easily accessible to employees in person, via e-mail, or by phone.

True or False

6. The board's role changes, depending on the size of the company and responsibility of the CEO.

True or False

7. Individually, red flags may not predictive of future problems in an organization

True or False