Monday, April 2, 2007

Key Concepts of Internal Control

COSO Definition of Internal Control


Internal control is 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
  • Compliance with applicable laws and regulations



Key Concepts

  • 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.

Resorce : InternalControl Key Concepts

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