Role in Internal Control
Internal auditing activity is primarily directed at improving internal control. Under the COSO Framework, 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 internal control categories:
- Effectiveness and efficiency of operations.
- Reliability of financial reporting.
- Compliance with laws and regulations.
- Safeguarding of Assets
Management is responsible for internal control. Managers establish policies and processes to help the organization achieve specific objectives in each of these categories. Internal auditors perform audits to evaluate whether the policies and processes are designed and operating effectively and provide recommendations for improvement.
In the United States, internal auditors may assist management with compliance with the Sarbanes-Oxley Act (SOX).
Read more about this topic: Internal Audit
Famous quotes containing the words role, internal and/or control:
“The role of the writer is not simply to arrange Being according to his own lights; he must also serve as a medium to Being and remain open to its often unfathomable dictates. This is the only way the work can transcend its creator and radiate its meaning further than the author himself can see or perceive.”
—Václav Havel (b. 1936)
“I believe that there was a great age, a great epoch when man did not make war: previous to 2000 B.C. Then the self had not really become aware of itself, it had not separated itself off, the spirit was not yet born, so there was no internal conflict, and hence no permanent external conflict.”
—D.H. (David Herbert)
“If the technology cannot shoulder the entire burden of strategic change, it nevertheless can set into motion a series of dynamics that present an important challenge to imperative control and the industrial division of labor. The more blurred the distinction between what workers know and what managers know, the more fragile and pointless any traditional relationships of domination and subordination between them will become.”
—Shoshana Zuboff (b. 1951)