Page 265 - COSO Guidance Book

– Timely — The information is obtainable from the information system when needed.

For example, in an actual case, the local owner of a multilocation pizza franchise pays hourly
pizza delivery personnel on a daily basis by 9:00 a.m. the following day. The owner needs to have
the total amount of net pay each day by 8:00 a.m. in order to transfer the correct amount to the
entity’s payroll account, which then automatically transfers each employee’s daily net pay to the
employee’s respective bank account.

– Valid — Information comes from authorized sources, is collected according to set procedures,
and represents actual events accurately.

For example, an entity’s bookkeeper might access the entity’s operating bank account on a daily
basis in order to reconcile the bank account. To access the bank account, the bookkeeper uses a
password that is changed every day and enters a security code that is sent to the bookkeeper’s
mobile device in a text message. Once the bookkeeper accesses the bank account, the
reconciliation provides some assurance that cash receipts and disbursement transactions from
various locations actually occurred since the transactions have been posted to the entity’s bank
account.

– Verifiable — Information is supported by evidence from the source for confirmation that the
information is what it purports to be.

For example, if a geographically remote unit of an entity states that it has eight employees, then
that information can be verified in numerous ways; for example, a webcam can be placed at the
business to observe the number of personnel.

The framework notes that information that is gathered from outsourced service providers (such
as those providing cloud computing that administer the entity’s business processes and other
third parties on whom the entity depends) should be governed by the same internal control
expectations set for information that is obtained directly by the entity.

 Point of focus — Considers costs and benefits

The nature, quantity, and precision of information communicated are commensurate with and
support the achievement of objectives.
For example, information might be costlier if it is required to be more precise or timelier. A day trader
in the stock market would want to have a high degree of assurance that stock market prices were
both as current and as accurate as possible.

Knowledge check

1. Which does not appropriately describe a characteristic of quality information?

a. Summarized.
b. Timely.
c. Valid.
d. Verifiable.

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