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In: Accounting

What are management's responsibilities related to internal control over financial reporting?

What are management's responsibilities related to internal control over financial reporting?

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A company's internal control over financial reporting is a process designed by the management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with the generally accepted accounting principles and policies.

The responsibility for maintaining an efficient and an effective system of internal control over financial reporting designed to provide reasonable assurance that:

  • financial information is reliable
  • assets are safeguarded
  • transactions are properly authorized

and recorded in accordance with the appropriate regulations and legislation's.

It is designed to reduce risks to a reasonable and acceptable level. It engages processes to identify the various risks and to assess the effectiveness and the efficiency of the key internal controls in the organisation and make necessary adjustments.

The effectiveness, efficiency and the adequacy of the internal controls over financial reporting is reviewed by the internal audit department and is overseen by the Internal Audit Committee. The internal audit committee is responsible to oversee the management's responsibilities for maintaining adequate internal control systems and quality of financial reporting.

ekkarill92 answered 2 years ago
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