Management′s Report on Internal Control, and the Accountant′s Response

Internal Control – Integrated Framework (COSO Report, 1992) defines internal control, suggests a framework for internal control, and presents criteria to use in evaluating controls. The document also provides guidance to management developing a report on controls for use by external parties. SSAE 2 , “Reporting on an Entity′s Internal Control Structure over Financial Reporting” (1993) offers assistance to the practitioner reporting on management′s assertion regarding internal control over financial reporting. Discusses and provides an example of management′s report on internal control prepared according to COSO. Also discusses the accountant′s examination under SSAE guidance of management′s assertions and subsequent report and provides an example of the accountant′s report. Concludes by discussing the new business opportunities for the accountant which may result from external reporting on internal controls over financial reporting.