在私人公司和非营利组织所不具备的内部控制外文翻译.docVIP

外文翻译 原文 Internal Control at Private Companies and Nonprofits Material Source: SEPTEMBER 2008/THE CPA JOURNAL Author: Chris Jeffrey All processes that had anything to do with financial statements were closely examined. All controls that mitigated even the smallest risks were documented and tested for effectiveness. Some companies identified and tested thousands of primary or key controls. Basically, a bottom-up approach was followed, meaning that processes and controls were identified, documented, and tested without much regard for the risks posed to the organization or its financial statements. The result was thousands of staff hours and millions of dollars. Not only did managements follow this approach, but so did their external auditors, causing audit fees to skyrocket. Why Internal Controls Are Important for All Organizations? So why would a private company or a nonprofit organization want to endure the pain of SOX compliance described above if it is not required to? The bottom line is this: Strong internal controls provide a competitive advantage. Organizations with strong internal controls can respond more quickly to risk events and can turn risks into opportunities. All organizations face risk. Risk can arise in many forms, including financial statement or reporting risk, fraud risk, reputational risk, environmental risk, and strategic risk. SOX was originally designed to address financial statement and reporting risk in addition to fraud risk. Why then, would an organization choose to address the risks surrounding reporting and fraud risk before other strategic, operational, or compliance risks? One compelling reason to start with financial and reporting risk is that it can provide immediate benefits. By implementing a strong system of internal controls over financial reporting, several short-term benefits can be realized, such as reduced incremental borrowing rates, increased confidence form investors or donors(in the case of a nonprofit),and a reductio