1. This Lecture Covers
Review of Internal Control Definitions

2. Control

3. Control

4. OECD Principles

5. Internal Control General Control Frameworks IT Control Frameworks
CICA/COCO
AICPA/COSO
IT Control Frameworks
ITCG
ISACA (CoBIT)
SysTrust
They all compete to varying degrees

6. Internal Control - CICA HB - Section 5200 Management discharges responsibility:
• Optimizing use of resources - ensure that reliable info is provided for business policies and monitoring implementation and compliance with the policies
• Prevention/detection of error fraud - using cost/benefit
• Safeguarding of assets - unintentional exposure
• Maintaining reliable control systems - to enhance reliability of financial information

7. CoCo

8. AICPA/COSO 1988 SAS 55 issued for Internal Control
1995 SAS 78 issued - it embodied COSO model of internal control into standards
2001 SAS 94 issued - it describes the effect of IT controls on auditor

9. Committee of Sponsoring Organizations of Treadway Commission
COSO control objectives: - effectiveness/efficiency of operations - reliability of fin. reporting - compliance with applicable laws and regulations.

10. COSO’s 5 components of Internal Control
• Control environment - integrity , ethical values and competence of personnel
• Risk Assessment - identifying, analyzing and managing risks
• Control Activities - selecting appropriate internal control policies & procedures to address risks and achieve the objectives
• Information and communication - enabling the entity's personnel to develop and exchange info needed to conduct, manage and control operations
• Monitoring - help determine and report on the effectiveness of I/C procedures