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    CBOK Requirements: Importance of Internal Controls

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    The document discusses several frameworks that are essential for internal auditors to understand as part of their common body of knowledge (CBOK). It describes how the Committee of Sponsoring Organizations (COSO) internal control framework became a worldwide standard for defining internal controls. The COSO framework was revised in 2014 to emphasize fraud management, understanding risks, and evolving organizational structures. It is now supported by 17 internal control principles. The document also notes the Sarbanes-Oxley Act (SOX) established mandatory rules for internal controls and that internal auditors should understand SOX's internal control review procedures. Finally, it introduces the Control Objectives for Information and Related Technology (COBIT) framework for IT controls and says all internal

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    CBOK Requirements: Importance of Internal Controls

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    The document discusses several frameworks that are essential for internal auditors to understand as part of their common body of knowledge (CBOK). It describes how the Committee of Sponsoring Organizations (COSO) internal control framework became a worldwide standard for defining internal controls. The COSO framework was revised in 2014 to emphasize fraud management, understanding risks, and evolving organizational structures. It is now supported by 17 internal control principles. The document also notes the Sarbanes-Oxley Act (SOX) established mandatory rules for internal controls and that internal auditors should understand SOX's internal control review procedures. Finally, it introduces the Control Objectives for Information and Related Technology (COBIT) framework for IT controls and says all internal

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    The document discusses several frameworks that are essential for internal auditors to understand as part of their common body of knowledge (CBOK). It describes how the Committee of Sponsoring Organizations (COSO) internal control framework became a worldwide standard for defining internal controls. The COSO framework was revised in 2014 to emphasize fraud management, understanding risks, and evolving organizational structures. It is now supported by 17 internal control principles. The document also notes the Sarbanes-Oxley Act (SOX) established mandatory rules for internal controls and that internal auditors should understand SOX's internal control review procedures. Finally, it introduces the Control Objectives for Information and Related Technology (COBIT) framework for IT controls and says all internal

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    107 views2 pages

    CBOK Requirements: Importance of Internal Controls

    Uploaded by

    meyy
    The document discusses several frameworks that are essential for internal auditors to understand as part of their common body of knowledge (CBOK). It describes how the Committee of Sponsoring Organizations (COSO) internal control framework became a worldwide standard for defining internal controls. The COSO framework was revised in 2014 to emphasize fraud management, understanding risks, and evolving organizational structures. It is now supported by 17 internal control principles. The document also notes the Sarbanes-Oxley Act (SOX) established mandatory rules for internal controls and that internal auditors should understand SOX's internal control review procedures. Finally, it introduces the Control Objectives for Information and Related Technology (COBIT) framework for IT controls and says all internal

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    CBOK Requirements: Importance of Internal Controls

    The four chapters in Part Two of this book introduce some common practices that are essential knowledge
    requirements for every internal auditor. Chapter 3 discusses how enterprises and their internal auditors went for
    many years without a clear and consistent understanding of the meaning and concept of internal controls. These
    defi- nitions were resolved and clarified, however, through the Committee of Sponsoring Organizations (COSO)
    internal control framework, a three‐dimensional description or model of how an enterprise should organize and
    think of its internal controls. Origi- nally launched as sort of best practices description of good internal controls,
    the COSO internal control framework has become first the U.S. and now a worldwide standard for defining and
    establishing good internal controls. Whether operating in an industry environment, as an IT specialist internal
    auditor, or in not‐for‐profit or governmental sectors, every internal auditor should possess a CBOK
    understanding of the COSO inter- nal control framework.

    The COSO internal control framework was revised and updated in 2014, with the need for a greater emphasis on
    fraud management and understanding risks as well as evolving worldwide enterprise organizational structures.
    COSO is now supported by a set of 17 internal control principles, a key internal audit knowledge requirement.
    The

    2.3 An Internal Auditing CBOK ◾ 15

    16 ◾ An Internal Audit Common Body of Knowledge

    revised COSO framework and its supporting principles are introduced in Chapters 3 and 4.

    The COSO internal control framework was revised and updated in 2014, with the need for a
    greater emphasis on fraud management and understanding risks as well as evolving
    worldwide enterprise organizational structures. COSO is now supported by a set of 17
    internal control principles, a key internal audit knowledge requirement. The

    2.3 An Internal Auditing CBOK ◾ 15

    16 ◾ An Internal Audit Common Body of Knowledge

    revised COSO framework and its supporting principles are introduced in Chapters 3 and 4.

    res in the United States and elsewhere became a clarion call for external auditing and
    corporate governance reforms. The result was the Sarbanes‐Oxley Act (SOx) in the United
    States, discussed in Chapter 5. SOx defines mandatory rules and reporting standards for many
    enterprises, large and small, in the United States and worldwide. Although the SOx
    legislation is very broad and has regulations and rules in some areas that may be of little
    interest to most internal auditors, a knowledge and understanding of the SOx internal control
    review procedures should be a CBOK requirement for all internal auditors working at least
    with public corporations. In addition, all internal auditors should have general CBOK
    understanding of the SOx internal control and its corporate governance rules.

    Chapter 6 introduces another very important internal control framework, the con- trol
    objectives for IT, or COBIT. An internal control framework with origins tied to IT audit
    specialists, COBIT is important for all internal auditors because IT systems and processes are
    pervasive in all aspects of virtually every enterprise today. Whether opera- tional, financial,
    or IT specialists, all internal auditors should have at least a high‐level CBOK understanding
    of the COBIT framework and how it might apply to their internal audit activities.

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