organizational structure
internal environment
Internal control for Smaller public companies-entities would
less resources in internal auditing
control environment component of internal control integrated framework
financial reporting competencies, human resources, organization structure
event identification
component of enterprise risk management that addresses an entity’s process for distinguishing risk and opportunities
risk assessment
components of enterprise risk management that addresses and entity’s process for establishing the likelihood and impact of events; financial reporting objective
Internal environment
components of enterprise risk management addresses an entity’s integrity and ethical values
major components of internal control (CRIME)
Control environment Risk assessment Information and Communication Monitoring Existing Control Activities
Internal control framework objectives (ORC))
operations objectives
reporting objectives
compliance objectives
operations objectives
effectiveness and efficiency of an entity’s operations
includes financial and operational performance goals as well as ensuring safeguards of assets
reporting objectives
reliability, timeliness, and transparency of an entity’s external and internal financial and nonfinancial reporting
compliance objectives
established to ensure the entity is adhering to all applicable laws and regulations
control environment (EBOCA)
- commitment to Ethics and integrity
- Board independence
- Organizational structure
- Commitment to Competence
- Accountability
risk assessment(EAR)
- Event identification
- Assess risk
- Respond to risk
Information and Communication
- obtain and use information
- internally communication information
- communicate with external parties
Monitoring activiites
- ongoing/separate evaluations
- communication of deficiencies
control activities
- select and develop control activities
- select and develop technology controls(IT)
- deploy through policies and procedures
ERM Objectives (SCOR)
- Strategic
- Compliance
- Operations
- Reporting
Order of ERM (IS EAR AIM)
- Internal environment
- Setting objectives
- Event identification
- Assessment of risk
- Risk response
- Activities (control)
- Information and communication
- Monitoring
The external auditors for the Horace Company assess the achievement of internal control objectives each year and communicate the assessment to management and the Board. Communication by the external auditor illustrates which principle of the information and communication component of the Committee on Sponsoring Organization’s Integrated Framework
external communication
