What are the Standards and Regulations Regarding Internal Control?
There are several standards and regulations regarding internal control that organizations must adhere to. Some of the most significant ones include:
COSO Framework: The Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a widely recognized framework for internal control that is used by organizations worldwide.
Sarbanes-Oxley Act (SOX): This act was enacted by the United States Congress in 2002 and establishes requirements for public companies and their auditors related to financial reporting, internal controls, and disclosure.
International Standards for the Professional Practice of Internal Auditing: The Institute of Internal Auditors (IIA) provides a framework of standards that outlines the principles and practices of effective internal auditing.
International Financial Reporting Standards (IFRS): The International Accounting Standards Board (IASB) provides standards for financial reporting that are used in many countries around the world.
- Generally Accepted Accounting Principles (GAAP): GAAP provides guidance for financial reporting in the United States and is established by the Financial Accounting Standards Board (FASB).
Industry-specific regulations: Some industries, such as healthcare, banking, and insurance, have specific regulations related to internal control that organizations must comply with.
Organizations need to understand and comply with these standards and regulations to ensure that their internal control systems are effective and that they are meeting their obligations to stakeholders, regulators, and the public.