04 -- Internal Control Concepts and Information Technology

04 Internal - CPA AUDITING STUDY UNIT 4 Internal Control Concepts and Information Technology Core Concepts A Internal control is a process effected

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CPA AUDITING - STUDY UNIT 4 Internal Control Concepts and Information Technology: Core Concepts A. Internal control is a process – effected by an entity’s board, management, and other personnel – designed to provide reasonable assurance regarding the achievement of objectives related to the reliability of financial reporting, the effectiveness and efficiency of operations, and compliance with applicable laws and regulations. B. Internal Control Components and Considerations. The five components are the control environment, risk assessment, control activities, information and communication, and monitoring. 1. The control environment component includes the factors of integrity and ethical values, commitment to competence, board of directors or audit committee participation, management’s philosophy and operating style, organizational structure, assignment of authority and responsibility, and human resource policies and practices. 2. The risk assessment component addresses relevant risks including events and circumstances that may adversely affect an entity’s ability to initiate, record, process, and report financial data consistent with financial statement assertions. Factors affecting risk are changes in operating environment; new personnel; new or revamped information systems;
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This note was uploaded on 08/29/2010 for the course CBEAM AUD taught by Professor Gleim during the Spring '10 term at De La Salle Lipa.

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04 Internal - CPA AUDITING STUDY UNIT 4 Internal Control Concepts and Information Technology Core Concepts A Internal control is a process effected

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