These all need to be based on the United States
1)What is COSO? What were the two principal purposes of its efforts regarding internal control, and why did it undertake these efforts?
2)Identify and describe one of the inherent limitations of internal control.
3)Identify and describe one of the six components of internal control.
4)What is the control environment? Identify and describe one of the factors that comprise the control environment.
1) What is COSO? What were the two principal purposes of COSO concerning its efforts regarding internal control, and why did it undertake these efforts?
Created in 1985 to sponsor the National Commission on Fraudulent Financial Reporting, the Committee of Sponsoring Organizations (COSO) is a private sector organization with a mission to improve the quality of financial reporting through effective internal controls (http://www.sox-online.com/coso_cobit_coso.html). According to COSO (2008), the two principal purposes of its efforts regarding internal control are to assist organizations to develop the effectiveness and efficiency of their internal control systems as well as to identify deficiencies, and provide guidance on how monitoring can be integrated into an organization's control process. In 1992, COSO introduced the internal control integrated framework (COSO, 2008). In order to achieve this mission, COSO conducted thorough research to determine the critical factors which lead to fraudulent financial reporting so as to create recommendations to deter fraudulent reporting.
2) Identify and describe one of the inherent limitations of internal control?
The control environment, according to the State of Maine (2005) are likely to function well if management considers that the internal controls created are vital to the success of the organization and communicates that view to employees.