TABLE OF CONTENTS The definition of internal control has come under great fanfare in the last few years with the number of accounting/audit failures coupled with the responding regulations. For example, the Sarbanes-Oxley Act has given new life to the COSO (Committee of Sponsoring Organizations) definition of internal control and expects companies to benchmark themselves to this standard. With this noted, internal control is broadly defined by COSO as: [1]
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 categories: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations.
[1]American Institute of Certified Public Accountants, Internal Control Integrated Framework, Committee of Sponsoring Organizations, 1992.
COSO [2] is a voluntary, private-sector organization dedicated to improving the quality of financial reporting through business ethics, effective internal controls, and corporate governance. COSO was...
