Acc 546

are control environment, risk assessment, control activities, information and communication, and monitoring. Control environment deals with the actions, policies, and procedures that show the attitudes of upper management about internal control and its importance. Risk assessment is the identification and analysis of risk for management when preparing the financial statements. Control activities are additional policies and procedures then the other four components. Information and communication systems are to initiate, record, process, and report transactions to maintain accountability. Monitoring deals with the ongoing and periodic assessment of the internal controls. Control activities, if there was an issue in this area, it can be detected by the policies and procedures that are in place do not work for what they are trying to achieve. If they are not working, then they would need to be rewritten to work for the task that it is trying to control. I do not think that if there was an issue in one area that it could be a stand-alone issue. The five components seem to all work together. If one fails, I can see the next being harder to follow without some type of issue.

Reference:

Arens, A. A., Elder, R.J., & Beasley, M.S. (2012). Auditing and Assurance Services: An Integrated Approach (14th Ed.). Pearson Education

What are the value and significance of COSO, SOX 404, SAS 115, and other pieces of legislation that affect the role of the accountant and auditor? How do these regulations affect internal controls? Any comments?

COSO – The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a joint initiative of the five private sector organizations: American Accounting Association, American Institute of CPA’s, Financial Executives International, The Association of Accountants and Financial Professionals in Business, and The Institute of Internal Auditors (The Committee of Sponsoring Organizations of the Treadway Commission, 2012). The...