Video: Existing Control Framework

In this lesson, explore how companies establish control activities to mitigate risks with Nick Palazzolo, CPA, guiding through the intricacies of existing control frameworks. Delve into the entity's policies and procedures that form the backbone of risk mitigation strategies, including the selection and development of control activities. The lesson zeroes in on technology controls within IT, emphasizing the deployment of specific control activities aimed at safeguarding against technological risks. With a mix of strategic insights and humor, Nick breaks down how policies are put into action to create a robust defense against fraud, reinforcing the crucial role that these existing control activities play within any organization.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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We've got one more component which is existing control activities. Here we have entities, policies, and procedures to mitigate risk. What are the policies and procedures that we have to mitigate risk? Well, we select and develop control activities. Then we have technology control which we'll see all this in the IT section.

No worries. The entity establishes control activities which help to mitigate risks to acceptable levels. Makes sense, right? We're going to have control activities such as segregation of duties and biometric scans. Whatever we have to do to help mitigate risks.

The entity establishes control activities over technology which help to mitigate risks to acceptable levels. Similar thing here, just general control activities. Maybe for financial information. This is specifically for technology. Lastly, deployment of policies and procedures.

The entity institutes its control activities through policies and procedures. This is the taking action activity. This is where we lay the hammer down and say no fraud. No fraud allowed in our company. Maybe in another company, but not our company.

Lastly, the most important point to remember is just to remember all of these as existing control activities.

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