| The COSO framework is based around the following | | | | influencing the control awareness of its staff. All |
| main ideas: | | | | components of internal control are based on this as it |
| The process of internal control is not an end in itself | | | | serves to regulation and organization to a business. |
| but is only a way of attaining an end. | | | | The Control environment component further includes |
| Controlling the internal working of a company is done | | | | the honor, moral values, operating methods of the |
| by people and must not be seen merely as some | | | | management, system for assigning authority and the |
| forms and manuals comprising of a company's policies. | | | | necessary procedures for organizing and developing |
| Internal control only provides maximum assurance and | | | | the staff in a business association. |
| not complete surety that a company's management is | | | | Next in line is assessment of risks both internally and |
| working to their fullest abilities. | | | | externally faced by an organization. For this it is |
| Attainment of goals in several similar categories is | | | | important to meet some objectives like the detection |
| what the internal control aims for. | | | | and examination of the risks that are most likely to |
| According to the Committee of Sponsoring | | | | pose a threat to attaining desired objectives. This is the |
| Organizations of the Treadway Commission internal | | | | definition of risk assessment. |
| control is defined as the procedure, introduced and put | | | | Another component is Control Activities. These are the |
| into action by the executives of a company, which is | | | | rules and regulations which assist in guaranteeing that |
| designed to make available reasonable assurance of | | | | the orders of the management are satisfactorily |
| the attainment of the following ends: | | | | carried out. This works in league with risk assessment |
| Competence and usefulness of operations | | | | that the required measures are being taken to achieve |
| Trustworthiness and dependability of fiscal reporting | | | | the ends of an organization. |
| Conformity to concerned rules and regulations | | | | Information and communication is a fourth component |
| The Five Components: | | | | of internal control in accordance with COSO. |
| As recognized by the COSO agenda, the process of | | | | Information systems are responsible for all news |
| internal control comprises of five interconnected parts. | | | | related to the operation and finances etc of a business |
| These make up for a highly competent framework for | | | | that helps in its smooth running. This information should |
| investigating and evaluating the system of internal | | | | also have an open link with external parties in addition |
| control that is put to use in a business. These | | | | to being widely available throughout the organization. |
| components are stated below: | | | | The last in the list of these interrelated components is |
| The first of these components is Control Environment. | | | | the monitoring of internal controls. |
| This deals with setting the character of a business and | | | | |