What is the COSO definition of internal control?
COSO defined 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 [three] categories: • Effectiveness and efficiency of operations. • Reliability of financial reporting. • Compliance with applicable laws and regulations.” What do the specified COSO objectives mean? The first category of objectives addresses an entity’s “basic business objectives, including performance and profitability goals and safeguarding of resources.” The second category relates to the “preparation of reliable published financial statements, including interim and condensed financial statements and selected financial data derived from those statements, such as earnings releases, reported publicly.” The third category addresses compliance with applicable laws. How did the SEC modify the COSO definition for purposes of the new rules? The definition used for purposes of the new rul
