Watch the movie “Rogue Trader”, Answer the questions on

Watch the movie “Rogue Trader”, Answer the questions on Exhibit 1. 

Exhibit 1 briefly defines each of five components of COSO followed by a list of questions.  While watching the movie you must answer a minimum of three, 3, questions from each category.  

EXHIBIT 1

Summary of COSO and Barings Bank

1. The ‘‘Control Environment’’ establishes the tone of a company and influences the control awareness of the employees. It is the foundation for all the other internal control components and provides discipline and structure for the entire business operation (Bagranoff et al. 2008, 270).

Questions relating to the Control Environment

1. Do board members and senior executives set a consistent example of high integrity and ethical behavior?

2. Is there a written code of conduct for employees, and is it reinforced by training, top down communications, and requirements for periodic written statements of compliance from key employees?

3. Are performance and incentive compensation targets reasonable and realistic?

4. Is it clear that fraudulent financial reporting at any level and in any form will not be tolerated?

5. Are ethics woven into criteria that are used to evaluate individual and business unit performance?

6. Does management react appropriately when receiving bad news from subordinates and  business units?

7. When instances of noncompliance are reported, do board members and senior executives take appropriate action and ensure effective action through testing?

8. Does a process exist to resolve close ethical calls?

9. Do board members and senior executives receive internal and external information from accounting and other information systems to make informed and timely decisions?