Organization 's Internal Control Integrated Framework

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The Committee of Sponsoring Organization’s Internal Control Integrated Framework is a study that establishes a common definition of internal control so as to meet the needs of various parties and it provides a standard in which organizations can use to assess their control systems and determine if and how to improve them. Since internal control is a process and addresses the achievement of objectives, not all controls are relevant to an audit; the controls that may affect the reliability of financial reporting are relevant to an audit.

In order for an audit of internal control to be performed in accordance with PCAOB requirements, the auditors’ overall approach should consist of five stages. The first stage is the planning of the
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Having a board of directors or audit committee oversee the company’s financial reports helps prevent management override of controls and management fraud, thus aiding in the effectiveness of internal control.

Risk assessment contributes to effective internal control by allowing management to identify, analyze, and respond to the variety of risks they’re ordinarily faced with, including the risk of material misstatements in the financial statements. Four factors that can result in increased financial reporting are personnel changes, the organization grows rapidly, corporate restructurings, and the changing of or adopting new accounting principles.

The accounting information system has five major objectives. The first one is to identify and record transactions that are valid. The second one is to describe the transactions with sufficient detail to permit proper classification of transactions for financial reporting. The third objective is to measure the value of transactions in such a way that allows their proper monetary value to be recorded in the financial statements. The fourth objective of the accounting information system is to determine the time period in which transactions occurred so that they are recorded in the proper accounting period. The fifth objective is to properly present the transactions and any related disclosures in the financial statements.

Performance reviews are conducted in order to see where their personnel are
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