policies and procedures that are established to assist organizations in accomplishing objectives and mitigating risks.b.
Organization implement control activities to mitigate the risks that are
to their organization.c.
Involves two componentsi.
The design and implementation of the controls including adescription of how the control activities operate.ii.
The operation of the controlsd.
3 process that affect the quality of data entering into the generalledgeri.
adjusting and closing journal entriese.
segregation of duties ( custodial and process transaction)ii.
adequately document transaction trail(provide evidence toauthorization)iv.
physical controls to safeguard assetsv.
reconciliation of control accounts with subsidiary ledgers,transactions recorded with submitted for processing andphysical counts of assets4.
information and communication: communication of the management a.
indentifying, capturing and exchanging information in a timely
fashion to enable accomplishment of the organization’s objectives.
monitoring: monitor to assure that everything operates effectivelya.
monitoring is a process that provides feedback n the effectivenessof the other four components of internal control.b.
Can be done through ongoing activities or separate evaluations.
entity level control:
exists on a higher level than transaction-level controls and affct multiple processes, transactions, accounts and assertions.Most BOD as three subcommittes:1.
the audit committee2.
the compensation committee3.
a nominating and governance committeepreventive VS detective control
: designed to prevent the occurrence of a misstatement, usuallymore cost efficient but my not provide documentary evidence that controls areworking.
:prevent some inappropriate transactions from being recorded.