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They were thinking not only of protecting stakeholders and shielding their companies from lawsuits but of developing better information about company operations in order to avoid making bad decisions.

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They include a strengthened control environment; more reliable documentation; increased audit committee involvement; better, less burdensome compliance with other statutory regimes; more standardized processes for IT and other functions; reduced complexity of organizational processes; better internal controls within partner companies; and more effective use of both automated and manual controls.But what exactly is a control structure composed of?A control is a practice established to help ensure that business processes are carried out consistently, safely, with the proper authorization, and in the manner prescribed.In others, a high sampling rate gave no clearer a picture of certain controls’ efficacy than a lower rate would have done.

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To reduce the compliance burden, some companies now resort to “controls rationalization,” which involves assessing which activities are most susceptible to error or abuse and whether they could be responsible for a material misstatement.Monthly reconciliation of cash accounts, for example, is undertaken to ferret out such conditions.



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