coso_s_internal_control.pptVIP

Internal Control Integrated Framework An Overview.. What is COSO? What Is Internal Control ? “A process effected by an entity’s board of directors,management and other personnel,designed to provide reasonable assurance regarding the achievements of objectives in the following categories: Effectiveness efficiency of operations. Reliability of financial reporting. Compliance with applicable laws and regulations.” Internal control is a process. It is a means to an end, not an end in itself. Internal control is effected by people.?It’s not merely policy manuals and forms, but people at every level of an organization. Internal control can be expected to provide only reasonable assurance, not absolute assurance, to an entity’s management and board. Internal control is geared to the achievement of objectives in one or more separate but overlapping categories. Components Of Internal Control Control Environment. Risk Assessment. Control Activities. Information Communication. Monitoring. Control Environment Sets the tone of the organization. The foundation for all other components. It includes the integrity,ethical values and competence of the people. Reflects: management’s philosophy operating style,the way management assigns authority and responsibility and organizes and develops its people, and the attention and direction provided by the board of directors. Risk Assessment Every entity faces internal external risks. Every entity sets objectives. Risk assessment is the identification and analysis of relevant risks to achievements of the objectives. Control Activities The policies and procedures that help ensure management directives are carried out. They help ensure that necessary actions are taken to address risks. Control activities occur throughout the entity at all levels and in all functions. They include activities such as approvals , authorization,reconciliations and segregation of duties. Information Communication Relevant information must