COSO Committee of Sponsoring Organizations of the Treadway Commission
Committee of Sponsoring Organizations of the Treadway Commission
The phrase "present and functioning" applies to components and principles.
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"Present" refers to the determination that components and relevant principles exist in the design and implementation of the system of internal control to achieve specified objectives.
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"Functioning" refers to the determination that components and relevant principles continue to exist in the conduct of the system of internal control to achieve specified objectives.
In determining whether a component is present and functioning, senior management, with board of director oversight, needs to determine to what extent relevant principles are present and functioning. However, a principle being present and functioning does not imply that the organization strives for the highest level of performance in applying that particular principle. Rather, management exercises judgment in balancing the cost and benefit of designing, implementing, and conducting internal control.
| Generated November 9, 2014 22:46:48 |