11COSO’s goal is to improve the quality of financial reporting Why?COSO’s goal is to improve the quality of financial reportingthrough a focus oncorporate governance,ethical practices, andinternal control.
13Definition of Internal Control A process, effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives.
26ETHICSDo board members and senior executives set a day-in, day-out example of high integrity and ethical behavior?
27ETHICS2. Is there a written code of conduct for employees, and is it reinforced by training, top down communications, and requirements for periodic written statements of compliance from key employees?
28ETHICS3. Are performance and incentive compensation targets reasonable and realistic, or do they create undue pressure on achievement of short- term results?
29ETHICS4. Is it clear that fraudulent financial reporting at any level and in any form will not be tolerated?
30ETHICS5. Are ethics woven into criteria that are used to evaluate individual and business unit performance?
31ETHICS6. Does management react appropriately when receiving bad news from subordinates and business units?
32ETHICS7. Does a process exist to resolve close ethical calls?
33ETHICS8. Are business risks identified and candidly discussed with the board of directors?
48AUDIT COMMITTEESHas the board recently reviewed adequacy of the audit committee’s written charter?
49AUDIT COMMITTEES2. Are audit committee members functioning and, in fact, independent of management?
50AUDIT COMMITTEES3. Do audit committee members possess an appropriate mix of operating and financial control expertise?
51AUDIT COMMITTEES4. Does the audit committee understand and monitor the broad organizational control environment?
52AUDIT COMMITTEES5. Does the audit committee oversee appropriateness, relevance, and reliability of operational and financial reporting to the board, as well as to investors and other external users?
53AUDIT COMMITTEES6. Does the audit committee oversee existence of and compliance with ethical standards?
54AUDIT COMMITTEES7. Does the audit committee or full board have a meaningful but challenging relationship with independent auditors, internal auditors, senior financial control executives, and key corporate and business unit operating executives?
65A Framework for Control This presentation was produced by
66is the internal audit profession’s global voice, recognized authority, The IIAis the internal audit profession’sglobal voice, recognized authority,acknowledged leader, chief advocateand principal educatorworldwide.