Indicate Whether Each of the Following Statements Regarding Internal Controls

question 58

Short Answer

Indicate whether each of the following statements regarding internal controls is true or false.
_____ a)The Sarbanes-Oxley Act of 2002 requires public companies to evaluate their internal controls and report those findings with SEC filings.
_____ b)The Sarbanes-Oxley Act applies to all companies,while the Enterprise Risk Management (ERM)framework is used by public companies only.
_____ c)Enterprise Risk Management (ERM)is an expansion of the earlier framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
_____ d)The COSO framework includes five interrelated components: separation of duties,quality employees,prenumbered documents,physical controls,and performance evaluations.
_____ e)Congress passed the Sarbanes-Oxley Act in 2002 in response to high profile fraud cases such as Enron and WorldCom.

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Definitions:

Mortgage Pass-Through

A type of security that pools mortgage loans and passes the principal and interest payments from borrowers to investors.

Mortgage Loans

Long-term loans used to purchase real estate property, secured by the property itself.

General Obligation Bonds

Bonds issued by municipalities that are backed by the full faith and credit of the issuing government, promising to repay the debt with general revenue.

Revenue Bond

A type of municipal bond supported by the revenue from a specific project, such as a toll bridge or highway.