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Ii managements philosophy and operating style iii

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ii.Management’s philosophy and operating style.iii. Organizational structure.iv. Assignment of authority and responsibility.v.Human resource policies and practices.vi. Competence of personnel.c.Control Processesare the policies, procedures (both manual andautomated), and activities that are part of a control framework, designed andoperated to ensure that risks are contained within the level that anorganization is willing to accept.
Domain V: Governance, Risk Management, and Control138© 2019 Powers Resources Corporation®. All rights reserved.2.Another broadly accepted definition of control is the one introduced by theCOSO Internal Control framework. As per COSO, internal control is defined as aprocess, effected by an entity’s board of directors, management and otherpersonnel, designed to provide reasonable assurance regarding theachievement of objectives in the following categories:a.Effectiveness and efficiency of operations.b.Reliability of financial reporting.c.Compliance with applicable laws and regulations.3.Control Riskrefers to the risk that a control does not achieve the desiredobjectives.B.The following are the key attributes of internal control.Internal Controlis:1.The actions taken to offset inherent risks and mitigate them or reduce theseinherent risks to acceptable levels to increase the likelihood that theorganization’s objectives are met.2.Primarily focused towards the achievement of organizational objectives at thevarious levels.3.A process comprised of interrelated ongoing tasks and activities, and isconsidered a means to an end, rather than an end by itself.4.Effected by people – it is not merely about policies and procedures’ manuals,systems, and forms, but about people and the actions they take at every level ofan organization to effect internal control.5.Capable of providing “reasonable assurance” rather than absolute assurance tothe entity’s stakeholders. No system of internal control is 100% fault proof.Collusion of employees, management override, and/or cost/benefit restrictionson the design of the internal control system may lead to internal control risks.6.A good system of internal control must have the “right” flexibility since too rigidmay prove unpractical and not cost-effective, and too flexible may increasecontrol risks. It must also be adaptable to the organization’s structure.7.The benefits of any internal control system must always be greater than its cost.C.Objectives of Internal Control (IC)Per the COSO Internal Control Framework, the objectives of IC may be grouped asfollows:1.Entity Operations (Effectiveness and efficiency) Objectives –referring to theentities’ effectiveness and efficiency of operations including operational andfinancial performance goals, profitability goals and safeguarding assets(resources).
Domain V: Governance, Risk Management, and Control© 2019 Powers Resources Corporation®. All rights reserved.1392.Entity Reporting Objectives –referring to the entity’s internal and external

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