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    Internal Control Framework: Oliveros, John Renz Opao, Ysabelle Louise BSA 2-9

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    Russel Valentine Oliveros
    The document discusses the COSO internal control framework, which includes 5 components: control environment, risk assessment, control activities, information and communication, and monitoring. It provides details on the principles and key elements of each component. The control environment is the foundation and sets the tone. Risk assessment involves identifying objectives and risks. Control activities are policies and procedures to address risks. Information and communication supports the other components. Monitoring assesses if the components are present and functioning.

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    Internal Control Framework: Oliveros, John Renz Opao, Ysabelle Louise BSA 2-9

    Uploaded by

    Russel Valentine Oliveros
    14 views10 pages
    The document discusses the COSO internal control framework, which includes 5 components: control environment, risk assessment, control activities, information and communication, and monitoring. It provides details on the principles and key elements of each component. The control environment is the foundation and sets the tone. Risk assessment involves identifying objectives and risks. Control activities are policies and procedures to address risks. Information and communication supports the other components. Monitoring assesses if the components are present and functioning.

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    The document discusses the COSO internal control framework, which includes 5 components: control environment, risk assessment, control activities, information and communication, and monitoring. It provides details on the principles and key elements of each component. The control environment is the foundation and sets the tone. Risk assessment involves identifying objectives and risks. Control activities are policies and procedures to address risks. Information and communication supports the other components. Monitoring assesses if the components are present and functioning.

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    14 views10 pages

    Internal Control Framework: Oliveros, John Renz Opao, Ysabelle Louise BSA 2-9

    Uploaded by

    Russel Valentine Oliveros
    The document discusses the COSO internal control framework, which includes 5 components: control environment, risk assessment, control activities, information and communication, and monitoring. It provides details on the principles and key elements of each component. The control environment is the foundation and sets the tone. Risk assessment involves identifying objectives and risks. Control activities are policies and procedures to address risks. Information and communication supports the other components. Monitoring assesses if the components are present and functioning.

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    © All Rights Reserved
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    of 10

    MODULE 13

    Internal Control
    Framework
    OLIVEROS, JOHN RENZ
    OPAO, YSABELLE LOUISE

    BSA 2-9
    INTERNAL CONTROL FRAMEWORK
     A recognized system of concepts encompassing all elements of internal control
     a process, effected by an entity's board of directors, management and other personnel,
    designed to provide reasonable assurance of the achievement of objectives.
    COSO’s Internal Control –
    Integrated Framework
     There are 17 PRINCIPLES representing fundamental concepts/component
    Concepts/Components:
     Control Environment
     Risk Assessment
     Control Activities
     Information and Communications
     Monitoring Activities
    Control Environment

     Foundation for a sound system of Internal Control


     Set standards, processes and structures for basis of internal control
    5 Principles:
     Integrity and Ethical Values
     Independence of Board of Directors from management; oversees internal control
     Structures, reporting lines, and authorities and responsibilities established by Management
     Attract, develop, and retain competent individuals
     Hold individuals accountable for internal control
    Risk Assessment

     Identifies and analyses risks and managing them


     Based on objectives and risks’ suitability to objectives.
    4 Principles:
     Specifies objectives with sufficient clarity
     Identifies and analyses risks
     Considers potential for fraud in assessing risks
     Identifies and assesses changes that have significant impact in control
    Control Activities
     Established through procedures and policies that ensures mitigation of risks
    3 Principles:
     Selects and develops control activities for mitigation of risk
     Selects and develops general control over technology
     Deploys control through policies and put into action through procedures
    Control activities includes:
     Authorizations and approvals
     Verifications
     Physical controls
     Controls over standing data
     Reconciliations
     Supervisory controls
     Performance reviews
    Control Activities (cont.)
    Segregation of Duties:
     Built into selection and development of control activities
     Reduce opportunities to allow penetration and concealment of errors or
    fraud
    Segregate key functions:
     Authorizing transaction
     Accounting records, prep. Source documents, maintaining journals
     Physical custody to assets
     Periodic reconciliation of physical assets
    Control Activities (cont. 2)
    Control Over Technology
     General IT – relate to many applications and support functions of
    applications
     Application Controls – process/transaction level controls specific to given
    application; grouped to similar functions
     Input Controls- verify integrity of data
     Processing controls- check whether data is accurate, complete, and valid
     Output controls- verify data outputs are accurate, complete, and valid
    Information and Communication
     Supports all other components
    3 Principles
     Obtains/generates and uses relevant, quality information
     Internally communicates info., including objectives and responsibilities
     Communicates with external parties regarding matters with internal effect
    Monitoring
     Assesses whether each of the 5 components are present and functioning
    2 Principles:
     Selects, develops, and performs evaluations to assess whether components
    are functioning and present
     Evaluates and communicates internal control deficiencies in timely manner
    to parties responsible for corrective actions.

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