Internal control and the COSO framework
Lesson 2 of 3 in Audit, Internal Control & Risk English · 22 minutes
Internal control concepts shape audit work and corporate governance. COSO framework is the dominant model in Canadian and international practice. This lesson covers what controls are, how they work, and how they're tested.
What you'll learn
- Apply COSO five-component framework
- Identify control types and procedures
- Test controls effectively
- Communicate control deficiencies
From the lesson
Internal control is the foundation of reliable financial reporting. The COSO framework (Committee of Sponsoring Organizations) is the dominant model — used by SEC issuers, Canadian public companies, and many private entities. Understanding COSO and being able to test controls is essential for IEP accountants entering Canadian audit or corporate accounting roles.
1. The COSO framework — five components
1. Control Environment: • 'Tone at the top.' • Commitment to integrity and ethics. • Board oversight. • Organization structure and authority. • Commitment to competence. • Accountability.
Examples: • Code of conduct. • Whistleblower policies. • Performance evaluation systems. • Hiring practices.
2.…