Find an article in the KU library that talks about internal control assessment. Based on the article and the reading in the text discuss what significant elements should a CPA firm’s methodology for assessing internal controls have? Why is each of these elements important? What risk does the CPA firm run if each of these elements were not included in the assessment of internal controls process?
discuss the importance of COS and how it helped define the process of internal controls (Pany & Whittington, 2019, pg. 260) (Applegate & Boyle, 2016). Boeing uses the COSO framework to asses that internal controls are “present, functioning and operating jointly” (Applegate & Boyle, 2016). Applegate states that the COSO framework supplied “increased discipline in the definition and alignment” of three key elements; that being the process objectives, assessment of inherent risk, and the control model. The assessment of risk is the most significant. The assessment should include observation, inspection, and tracing transactions. The process objective comes from “company policies and procedures, industry standards, or other business goals..” for Boeing and their enterprise risk management documents should support assessments (Applegate & Boyle, 2016). Boeing’s control model consists of 28 types of controls, which have assisted in finding important controls and classifying them by component (Applegate & Boyle, 2016). Before the COSO framework instances of fraud and errors were more prevalent. A true definition and standard created by COSO offer internal auditors a guide to controls that external auditors can follow, track and evaluate.