论文-外文文献.doc

How to Monitor Internal Controls Introduction ： Internal controls are critical for any organization to function effectively. And with an effective system of controls in place, you minimize risk. But how should you monitor controls to ensure their quality and performance? Internal control is critical to the effective functioning of any organization. Boards of directors, CEOs, and internal auditors all work to attain the entity’s objectives; the system of internal control is the means by which these parties help to ensure that those objectives are met. Controls help an entity to operate efficiently. In addition, with an effective system of controls in place, risk is minimized. Also, controls serve to promote the reliability of both operations and information that is produced relative to the operations. Discussion Document Issued In its seminal document “Internal Control—Integrated Framework,” the Committee of Sponsoring Organizations of the Treadway Commission (COSO; 1992) defines internal control as: A process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations. The Committee went on to explain that a system of internal control includes five components. They are: ? control environment, ? risk assessment, ? information and communication, ? control activities, and ? monitoring. COSO’s definition and the five components have proven useful to a variety of groups, including boards of directors and CEOs. Respectively, these groups have responsibilities for oversight of a system of internal control and for the design and operation of the system. Further, internal auditors have found COSO’s guidance useful. This group may be asked by the board or management to test controls. COSO recently published a Discus