What is internal control in accounting?
The Committee Of Sponsoring Organizations (COSO) has defined internal control as a process, affected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives. The COSO framework has become the generally accepted internal control framework in the United States. It consists of five integrated components.Control EnvironmentThe control environment is management’s philosophy and approach to the organization. Since it is the basis of the other components of internal control, if the control environment is not effective the other components of internal control will not be effective either.Risk AssessmentRisk assessment is the identification of risks effecting the achievement of the organizations goals and objectives and the determination of how those risks should be handled. Internal and external risks should be assessed.Control ActivitiesControl activities consist of policies and procedures designed to
