What are the key terms in the internal control?

Reportable condition has the same meaning as the term significant deficiency. These two terms are used to define a significant deficiency in the design or operation of internal control that could adversely affect a company’s ability to record, process, summarize, and report financial data consistent with the assertions of management in the company’s financial statements. […]

What is the framework of audit in China?

What is the monitoring?

The internal control system must be monitored by management and others in the organization. This is the framework element that is associated with the internal audit function in the company, as well as other means of monitoring such as general management activities and supervisory activities. It is important that internal control deficiencies be reported upstream, […]

What is information and communication?

Communication addresses the need in the organization to identify, capture, and communicate information to the right people to enable them to carry out their responsibilities. Information systems within the organization are keys to this element of internal control. Internal information, as well as external events, activities, and conditions must be communicated to enable management to […]

What is the framework of audit in China?

What are control activities?

Policies and procedures can help ensure that management directives are carried out. Control activities occur throughout the organization at all levels in all functions. These include activities such as approvals, authorizations, verifications, reconciliations, reviews of operating performance, security of assets, and segregation of duties, etc.

What is risk assessment?

The identification and analysis of relevant risks to achieve the objectives form the basis to determine how risks should be managed. This component should address the risks, both internal and external, that must be assessed. Before conducting a risk assessment, objectives must be set and linked at different levels.

What is control environment?

Control environment is the foundation for all other components of internal control, providing discipline and structure. It is sometimes referred to as the “tone at the top” of the organization, meaning the integrity, ethical values, and competence of the entity’s people; management’s philosophy and operating style; the way management assigns authority and responsibility and organizes […]

What is the framework of audit in China?

What are the main contents of internal control?

The COSO Framework consists of five interrelated components as follows: a)       Control environment. b)       Risk assessment. c)       Control activities. d)       Information and communication. e)       Monitoring. These five components are linked together, thus forming an integrated system that can react dynamically to changing conditions. The internal control system is intertwined with the organization’s operating activities, and […]

What is the definition of internal control?

In 1992, the Committee of Sponsoring Organizations (“COSO”) of the National Commission on Fraudulent Financial Reporting (also known as the Treadway Commission) published a document called Internal Control – Integrated Framework, which defined internal control as “a process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding […]

What are the main differences between PRC GAAP, IFRS and US GAAP?⑶

Topic PRC GAAP(New Accounting Standard for Enterprises issued by Ministry of Finance of P.R.C on Feb.15, 2006) IAS/IFRS US GAAP Intangible asset received as a capital contribution from an owner It should specify by the value regulated in investment contract or agreement, except that the value is not fair. Measured at fair value.   Cost mode […]