Management and Organizational Studies 3363A/B Chapter Notes - Chapter 9: Corporate Governance Of Information Technology, Financial Audit, Internal Audit

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3363A/B
• Professor: Michelle Loveland

Document Summary

Management objectives: maintain reliable control systems, safeguarding assets, optimizing the use of resources, preventing and detecting error and fraud. Fraudulent financial reporting: this is the intentional misstatement or omission of amounts or disclosure of financial statements to deceive users, earnings management the purpose is to help management achieve earning targets. Income smoothing revenues and expenses are shifted across accounting periods to reduce fluctuations in earnings. Incentives/pressures: opportunities, attitudes/rationalization, much higher when all three are present, applies to both fraudulent financial reporting as well as misappropriation of assets. Coso framework: coso: committee of sponsoring organizations, coso identifies five components of internal control that need to be in place and integrated to ensure the achievement of each of the objectives. Look for: adequate segregation of duties, proper authorization of transactions and activities, adequate documents and records, physical and logical control over assets and records.