ACCT 001 Lecture Notes - Lecture 26: Financial Accounting Standards Board, Financial Audit, Internal Control
17 Sep 2020
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Document Summary
Monitoring assesses the performance of the internal control system and improves control effectiveness by identifying weaknesses, evaluating and communicating deficiencies to responsible parties, and taking appropriate corrective actions. The internal control system can be monitored either through ongoing efforts by management or by separate evaluations. Ongoing monitoring efforts may include observing both employee behavior and warning signs from the accounting system. Separate monitoring evaluations are generally performed when there are major changes in strategy, senior management, business structure, or operations. In large businesses, internal auditors who are independent of operations normally are responsible for monitoring the internal control system. Internal auditors can report issues and concerns to an audit committee of the. In addition, external auditors also evaluate internal control as a normal part of board of directors, who are independent of management. their annual financial statement audit. These indicators may be clues to internal control problems. Abrupt change in lifestyle (without winning the lottery).
