Internal control is a process, effected by an entity's management and personnel, designed to provide reasonable assurance regarding achievement of objectives in the reliability of financial reporting, effectiveness and efficiency of operations, and in compliance with applicable laws and regulations Internal control consists of five interrelated components: the control environment, risk assessment, control activities, information and communications, and monitoring. Auditing standards require an independent auditor to obtain an understanding of the client's internal controls based on these five elements. This standard was issued as a result of a report issued several years ago by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. In the United States in order to identify factors that lead to fraudulent financial reporting and identify steps toward corrective action. The standard, as recently amended, implements the findings of the COSO Report.

Consequently, governmental entities should review their internal controls, document the policies in place that support them, and set up a system of monitoring in order to meet requirements set forth by the standards. Our firm stands prepared to provide our clients with the expert assistance required to update their internal controls, including documentation and the establishment of management monitoring procedures to assist in compliance with the standards.