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Role of internal controls and capital in a competitive firm

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What role do internal controls and capital play within a competitive firm?

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Solution Summary

The 333 word cited solution explains the design and use of internal controls with a separate section about capital. The explanations are detailed and practical.

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First, the design and use of internal controls:

According to COSO, a system of internal controls is "...designed to provide reasonable assurance regarding the achievement of objectives in the following categories: 1) reliability of financial reporting, 2) compliance with applicable laws and regulations, 3) effectiveness and efficiency of operations, and 4) safeguarding of assets." COSO www.coso.org

If the internal controls are not functioning properly, the following negative results could occur:

1. the client's financial ...

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