Creating an Internal Environment Framework An organization’s internal environmen
ID: 2750733 • Letter: C
Question
Creating an Internal Environment Framework
An organization’s internal environment is responsible for generating reliable financial reporting and complying with laws and regulations. Internal business process improvement methods establish best practices and strengthen corporate governance and risk management. Consider the COSO framework using the PowerPoint presentation and the ERM Framework graphic in this week's Resources. Write a 1-2 page paper using an internal environment that you are familiar with and complete the COSO framework for this environment as outlined below. For example, an internal environment might be the development of an organization’s incentive systems.
(1) State the control objectives
(2) Identify the risk sources
(3) Perform a risk assessment
(4) Develop a risk response
(5) Determine the control activities
(6) Provide a method of informing and communicating the results
(7) Discuss the process that is used for monitoring the information
Your 1- to 2-page paper should reflect the application of the Resources presented this week, as well as knowledge gained from previous weeks’ Required or Optional Readings.
Be sure to support your work with specific citations from this week’s Learning Resources and any additional resources.
RESOURCES:
Chapter 7 from the following book:
http://wafaa-sherif.com/new/ar/wp-content/uploads/2012/11/Enterprise%20Risk%20Management.pdf
-AND-
https://class.waldenu.edu/bbcswebdav/institution/USW1/201620_04/MS_ACCT/ACCT_6600_ACMG_6600_MMBA_6784/Week%203/Resources/Resources/embedded/burnabyhass2009.pdf
-AND-
https://class.waldenu.edu/bbcswebdav/institution/USW1/201620_04/MS_ACCT/ACCT_6600_ACMG_6600_MMBA_6784/Week%203/Resources/Resources/embedded/worthingtonetal2009.pdf
-AND-
http://search.proquest.com.ezp.waldenulibrary.org/docview/202682331?accountid=14872
Explanation / Answer
Answer :-
Internal Control means different things to different people. This causes confusion among businesspeople, legislators, regulators and others. Resulting miscommunication and different expectations cause problems within an enterprise. Internal control is broadly defined as a process, effected by an entity's board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:-
1. Effectiveness and efficiency of operations.
2. Reliability of financial reporting.
3. Compliance with applicable laws and regulations.
The control environment sets the tone of an organization,Influencing the control consciousness of its people. It is the foundation for all other components of internal control,providing discipline and structure. Contorl environment factors include the integrity, ethical values and competence of the entity's people; managements philosophy and operating style; the way management assigns authority and responsibility, and organizes and develops its people; and the attention and direction provided by the board of directors.Every entity faces a variety of risks from external and internal sources that must be assessed. A precondition to risk assessment is establishment of objectives, linked at different levels and internally consistent. Risk assessment is the identification and analysis of relevant risks to achievement of the objectives, forming a basis for determining how the risks should be managed. Because economic, industry, regulatory and operating conditions will continue to change, mechanisms are needed to identify and deal with the special risks associated with change.
Control Activities are the policies and procedures that help ensure management directives are carried out. They help ensure that necessary actions are taken to address risks to achievement of the entity's objectives. Control activities occur throughout the organization, at all levels and in all functions. They include a range of activities as diverse as approvals, authorizations, verifications, reconciliations, reviews of operating performance, security of assets and segregation of duties
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.