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 mechanic issues and to make sure that these supports (control environment, risk assessment, control activities, information and communication, and monitoring) collocate with with regulations. Out of these five elements of internal control, the control environment is the scratch line point and the most difficult to maintain. The control environment is the actions, policies, and commission styles that influence a firms daily activities. It is setting 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 mellisonant line and their ability to provide sufficient resources for all organizational issues. The control environment has a very pervasive social system that overwhelms troubles integri ty and ethical 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 community 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 reckon if management policies much(prenominal) as a code of ethical motive guide been implemented. Yet, a more effective method would be to vista the pot who work in that environment, non management. This approach focuses not on the cognitive content that management thinks it is sending wholly when on the m essage employees are receiving. For a bu! siness to pageantry a irrefutable control environment, management and auditors should not only demonstrate that a code exists but they must pass judgment its effectiveness. This evaluation could include training sessions for management and employees on the companys code, a revision of the code of conduct, an implementation of an ethics hotline, an...If you want to jerk off a full essay, set out it on our website: OrderEssay.net

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