Format:
10 T/F
Short Answers:
Ex. how did Jensen define firms?
Computation:
Absorption/VC
Cost of capacity
PWC
1-2 questions, just look over the materials and slides
Agency Theory Brickley Ch. 10
How define firm?
Contracts
Agency problems/cost (2 definitions) be able to explain
5 examples- be able to know what they mean
2 fundamental problems in contracts, adverse selection/moral hazard
Market pressure, internal systems
COSO Framework***
Know everything!
5 Components and be able to match principles with their component
Look at Protiviti ppt, according to the 2nd objective of an organization we have to use operations and reporting, previously it was financial reporting. Companies can only use the recent version of COSO
Def. of internal control and effective ones
Reasonable assurance and why? (7)
Goals and objectives outlined in COSO (Operations, Reporting, Compliance)
Strategic setting VS internal controls
Risk
3 concepts of Risk
Risk is a subjective concept, explain why
Prospect theory
Gain/loss utility curve
Business Process
Definition
Why is modeling important? Analyze room for improvement. (Document flow chart, business process map)
Symbols (NEED TO KNOW)
Validity, Accuracy, completeness…etc. (6 names and the risk concept definition)
5 internal controls
Revenue Cycle:
Business process map understanding the flow of documents
Objectives and risks
Internal controls associated
EX. To address completeness in the revenue cycle what would you do?
General signs of risky processes
Ethical issues
Fraud triangle
Illegal practices
Purchase Cycle
Business process map
More complicated than revenue because it is related to obligation
Concept checks
Payroll
Sequential processes- business process map
Concept check problems
List of signs related to risky