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Management control system (Integrated Framework (The Board of Directors,…
Management control system
Components of Internal Control
Risk Assessment
Control Activities
Control Environment
Information and Communication
Monitoring Activities
Components and Principles
Control Environment
Risk Assessment
Control Activities
Information and Communication
Monitoring Activities
Objectives
Reporting Objectives
Compliance Objectives
Operations Objectives
Internal Control
• Geared to the achievement of objectives in one or more categories
• A process consisting of ongoing tasks and activities
• Effected by people
• Able to provide reasonable assurance
• Adaptable to the entity structure
Effective Internal Control
The five components operate together in an integrated manner.
Achieves effective and efficient operations when external events
Each of the five components and relevant principles is present and functioning.
Understands the extent to which operations are managed effectively and efficiently
Prepares reports in conformity with applicable rules, regulations, and standards or with the entity’s specified reporting objectives
Complies with applicable laws, rules, regulations, and external standards
Limitatios
Integrated Framework
The Board of Directors
Other Management and Personnel
Senior Management
Internal Auditors
Independent Auditors
Educators
Other Professional Organizations
Relationship of Objectives and Components
• The three categories of objectives—operations, reporting, and compliance—are represented by the columns.
• The five components are represented by the rows.
• An entity’s organizational structure is represented by the third dimension.