COMM 455 Lecture Notes - Lecture 12: Internal Control, Financial Statement, Risk Assessment
Document Summary
Auditor is concerned with internal controls that affect financial reporting: not concerned about every control that aren"t related to financial reporting. Committee of sponsoring organization = coso (not on exam) treadway commission. Control environment *** (do people care about controls in the company?: risk assessment **, information and communication, control activities **, monitoring. Board participation: enron: no one ever said/question anything against. How does management identify and analyze risks relevant to financial. Are action plans developed for dealing with these risks: management: brainstorm what potential risks they can identify (operations, systems, computer, etc); auditor: feel more comfortable if management has thought of these. Never done or documented don"t know if they should/should not be processed: physical / logical access controls, segregation of duties. Alternatives: involvement of owner observing and supervising, formality of processes. Give ee impression you are watching over them. Ee makes decision have memo that they have done it.
