COSO: A Framework for Internal Control What is internal control as defined by COSO? Also explain, the other elements of the definition that are important to internal control
COSO defines internal control 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 categories:
(1) reliability of financial reporting,
(2) compliance with applicable laws and regulations, and
(3) effectiveness and efficiency of operations.
Other elements of the definition that are important:
* Is a process designed to accomplish the organization's objectives.
* Starts at the top of the organization with the board of directors and management creating and reinforcing a structure and a tone for controls in the organization.
* Directly or indirectly includes all people in the organization, ranging from the shipping clerk to the internal auditor to the chief financial officer.
* Is broader than internal control over financial reporting.
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