Ratios, Vertical, and Horizontal Analysis
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- Date Submitted: 09/16/2012 01:39 PM
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Internal Controls
Financial Accounting Concepts and Principles
Leda Solis
September 9, 2012
University of Phoenix
Zeno Gavales
Internal Control is the process of ensuring the integrity of the accounting and finance records of company, and to catch any accounting irregularities. Internal Controls are used to evaluate the efficiency of a company, and to maintain the integrity of financial records. Controls are updated on the regular basis to reflect changes in regulations. “The Sarbanes-Oxley Act of 2002 addresses perceived weaknesses in internal controls, the systems a public company employs to collect, process, and disclose financial information to satisfy its statutory reporting requirements. Recent corporate and accounting frauds have demonstrated the inadequacy of internal controls with regard to revenue recognition. The Act also contains requirements aimed at ensuring proper revenue recognition.”
Internal Controls are required by law, and when kept by a company it increases the likelihood that goals are met. There are two primary internal controls, which are the COSO model, and the COCO model. The COCO model is the most popular, and is based on a model published by the Committee of Sponsoring Organization of the Treadway Commission in 1992. It was created to help businesses provide assurance regarding the effectiveness and efficiency of operations, and reliability of financial reporting.
The COCO model identifies three objectives, effectiveness, efficiency of operations, and reliability of internal and external reporting, and compliance with applicable laws and regulations as well as internal policies. The COCO model defines purpose, capability, commitment, and monitoring. The COCO model was published in 1995 by the Canadian Institute of Chartered Accountants with the purpose of gathering the best results for a company to achieve the best resources, systems, processes, culture, structure, and tasks to support people in achieving the...
Internal Controls
Financial Accounting Concepts and Principles
Leda Solis
September 9, 2012
University of Phoenix
Zeno Gavales
Internal Control is the process of ensuring the integrity of the accounting and finance records of company, and to catch any accounting irregularities. Internal Controls are used to evaluate the efficiency of a company, and to maintain the integrity of financial records. Controls are updated on the regular basis to reflect changes in regulations. “The Sarbanes-Oxley Act of 2002 addresses perceived weaknesses in internal controls, the systems a public company employs to collect, process, and disclose financial information to satisfy its statutory reporting requirements. Recent corporate and accounting frauds have demonstrated the inadequacy of internal controls with regard to revenue recognition. The Act also contains requirements aimed at ensuring proper revenue recognition.”
Internal Controls are required by law, and when kept by a company it increases the likelihood that goals are met. There are two primary internal controls, which are the COSO model, and the COCO model. The COCO model is the most popular, and is based on a model published by the Committee of Sponsoring Organization of the Treadway Commission in 1992. It was created to help businesses provide assurance regarding the effectiveness and efficiency of operations, and reliability of financial reporting.
The COCO model identifies three objectives, effectiveness, efficiency of operations, and reliability of internal and external reporting, and compliance with applicable laws and regulations as well as internal policies. The COCO model defines purpose, capability, commitment, and monitoring. The COCO model was published in 1995 by the Canadian Institute of Chartered Accountants with the purpose of gathering the best results for a company to achieve the best resources, systems, processes, culture, structure, and tasks to support people in achieving the...