The World of Auditing: the Control Environment and Risk Assessment

The Committee of Sponsoring Organizations (COSO) requires companies to establish effective internal trains to prevent operative issues and to make sure that these tempers (control environment, risk assessment, control activities, information and communication, and monitoring) take after with regulations. Out of these five elements of internal control, the control environment is the starting time point and the most difficult to maintain. The control environment is the actions, policies, and management styles that influence a firms daily activities. It is backdrop the tone of organization and influencing control consciousness of its employees. When we think of a control environment, we consider the philosophy, ideology, beliefs, attitude, key personnel, and concern of a ariose line and their ability to provide sufficient resources for all organisational issues. The control environment has a very pervasive expression that overwhelms troubles integrity and eth ical values and a commitment to organizational competence. In a good control environment, employees spang that doing the right thing is expected even if it hurts the corporation whereas in a weak environment, procedures are constantly ignored.

In a traditional approach, auditors assess the control environment by way out a questionnaire to senior management to charm if management policies much(prenominal) as a code of moral philosophy stupefy been implemented. Yet, a more effective method would be to keep an eye on the pot who work in that environment, non management. This approach focuses not on the cognitive content that management thinks i! t is sending yet on the message employees are receiving. For a business to pomposity a irrefutable control environment, management and auditors should not only demonstrate that a code exists but they must assess its effectiveness. This evaluation could include training sessions for management and employees on the fiats code, a revision of the code of conduct, an implementation of an ethics hotline, an...If you want to jerk off a full essay, order it on our website: OrderCustomPaper.com

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