Which party has the primary responsibility to oversee an organizations financial reporting and internal control process?
Internal ControlsInternal control is all of the policies and procedures management uses to achieve the following goals. Show
ResponsibilityManagement Responsibility: Administrative management is responsible for maintaining an adequate system of internal control. Management is responsible for communicating the expectations and duties of staff as part of a control environment. They are also responsible for assuring that the other major areas of an internal control framework are addressed. Staff Responsibility: Staff and operating personnel are responsible for carrying out the internal control activities set forth by management. Framework for Internal ControlThe framework of a good internal control system includes:
Internal Control Activities and Best PracticesInternal control activities are the policies and procedures as well as the daily activities that occur within an internal control system. A good internal control system should include the control activities listed below. These activities generally fit into two types of activities.
Click on the links below for information regarding these activities including best practices.
Other Internal Control Best PracticesWith a good internal control system in place, other considerations to keep in mind include:
Additional InformationWashington State Office of Financial Management's guide to internal control and auditing Who is responsible for internal financial controls?Management is responsible for establishing internal controls. In order to maintain effective internal controls, management should: Maintain adequate policies and procedures; Communicate these policies and procedures; and.
Who is responsible for financial reporting?Directors prepare financial statements, audit committees monitor the integrity of financial information. Auditors audit the financial statements and perform other procedures on other parts of the annual report.
Which parties are responsible for the internal control process of an entity?Internal control is a process, effected by an entity's board of directors, management and other personnel, designed to provide reasonable assurance: That information is reliable, accurate and timely. Of compliance with applicable laws, regulations, contracts, policies and procedures.
Who is responsible for the effectiveness of internal controls over financial reporting?. 71 The auditor should form an opinion on the effectiveness of internal control over financial reporting by evaluating evidence obtained from all sources, including the auditor's testing of controls, misstatements detected during the financial statement audit, and any identified control deficiencies.
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