Risk Process Analysis and Internal Control System Implementation

Author:Alexandru CORACIONI

JEL:M10, M42

DOI:

Keywords:internal control, risks evaluation, COSO model, ERM

Abstract:
The article presents the concept of risk administration integrated within the internal control system. In accordance with ISA 265 Communicating Deficiencies in Internal Control to Those Charged with Governance and Management, the financial auditor should communicate the deficiencies observed in internal control and which may affect significantly the financial statements. The entities have to implement internal control systems which provides reasonable assurance not only regarding the reporting reliability, but also the effectiveness and efficiency of the operations, or compliance with applicable laws and regulations. Included in internal control system, an important component is the risk assessment, which within the COSO public exposure model – 2011, is based on 4 essential principles, including 19 attributes. In our domestic legal environment, the internal control system is well defined inside the public sector institution, the private owned entities having the freedom of choice for the implementation of this concept. For the local business environment, the concern regarding the risk management integration within the internal control system is in an incipient phase.

---