ACC 113 Lecture Notes - Lecture 25: Internal Control, Risk Assessment, Financial Statement

• School: Tunxis Community College
• Department: Accounting
• Course: ACC 113
• Professor: Lardie

Document Summary

Process management uses to its operational and financial reporting objectives. Provides reasonable assurance that: operations are effective and efficient, financial reporting is reliable, compliance with laws and regulations. In 1992, committee of sponsoring organisations (coso) of treadway commission released internal control integrated framework which aims to provide a common understanding of internal control and has become standard for understanding what good internal control is. Control environment atmosphere members of an organisation conduct activities and carry out responsibilities. Reflects overall control consciousness of an organisation. Factors affecting control environment: overall integrity and ethics of personnel, management"s philosophy and operating style, assignment of authority and responsibility, general structure of organisation. Risk assessment identification and analysis of the risks that threaten the achievement of organisational objectives. Risks can be analysed by: estimating significance of risk, assessing likelihood of risk occurring, considering what actions should be taken to manage risk. Risks of minor significance can be ignored while significant risks demand considerable attention.