Page 309 - COSO Guidance Book

Chapter 10

Internal Control for Smaller Entities

Learning objectives

 Identify characteristics of smaller entities, whether public or private, not-for-profit, or governmental.

 Recall challenges to smaller entities in establishing effective internal controls.

 Identify how smaller entities can increase their efficiencies over assessing internal control.

Introduction

Internal control has been a major topic for corporate management and auditors of publicly held
companies ever since the Sarbanes-Oxley Act of 2002 (SOX) was passed by Congress. SOX also
established the PCAOB, a private-sector, not-for-profit corporation whose mission is to oversee “the
audits of public companies and SEC-registered brokers and dealers in order to protect investors and
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further the public interest in the preparation of informative, accurate, and independent audit reports.”
One PCAOB standard that has a significant impact on public companies is Auditing Standard No. 5, An
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Audit of Internal Control Over Financial Reporting That Is Integrated with an Audit of Financial Statements.

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https://pcaobus.org/About/History/Pages/mission-vision-values.aspx
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AICPA, PCAOB Standards and Related Rules, Auditing Standards

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