chap4 - 1 Controls and Accountants ...

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Unformatted text preview: 1 Controls and Accountants  Internal control is a process designed to provide reasonable assurance regarding achievement of: Effectiveness and efficiency of operations Reliability of financial reporting Compliance with laws and regulations n Accountants roles and controls Managers: SOX and Public Company Accounting Oversight Board Statement No. 2 Users: be able to apply controls appropriately System Designers: risk / reward tradeoff for controls Evaluators: Internal evaluation of controls, External attestation of controls, Conduct audit of financial statements 2 Components of Internal Control  Control Environment Integrity, ethical values, management philosophy, etc. n Risk Assessment Identification and analysis of risks that interfere with controls n Control Activities Performance reviews Segregation of duties Application (specific) controls General controls n Information and Communication Provide understanding of individual roles and responsibilities n Monitoring Make sure it is working 3 Internal Control Objectives  Execution Objectives Proper execution of transactions in revenue and acquisition cycles n proper delivery of goods, collection and handling of $ n Information System Objectives Proper file maintenance, recording, updating, and reporting of data in an information system n Asset Protection Objectives Safeguarding of assets (not just technology assets) n Performance Objectives Favorable performance of an organization, person, department or service n Even if Execution Objectives are met, performance needs to be evaluated 4 Revenue & Acquisition Cycle Risks...
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chap4 - 1 Controls and Accountants ...

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