What is the opinion based on the Treadway Commission? (Seeparagraphs below) Please raise thoughtful questions, analyzingrelevant issues, building on ideas, synthesize across readings anddiscussions, expand the class perspective, and appropriatelychallenge assumptions and perspectives.
The Treadway Commission is an important entity in the history ofperformance and internal auditing because it helped "defineinternal controls in terms of achieving three major objectives:effectiveness and efficiency of operations, compliance with lawsand regulations, and reliability of financial reporting." (Ives,Hancox, 2014).
The Treadway Commission was responsible for the Committee ofSponsoring Organizations (COSO Report) that helped define theground rules for what should be covered in an audit. They set upthe five elements of an internal control. The control environment,risk factors, control activities, a system for monitoring internalcontrols and performances, and having an information system.
The five elements were established to help make fraudulentbehavior and waste more difficult endeavors. The goal was toestablish internal controls to help management and to createenvironment that deters bad behaviour and increase performance inthe processes. The control environment is a tone that managementsets in order to let employees and contractors know that internalcontrol is a priority for the organization. The factors also helpdetermine risk factors and how to mitigate them. Thirdly they putin place control activities, such as checks and balances to ensurethat no one person has complete control over a critical process.There also needs to be a system to monitor the internal controls tomake sure they are working properly and to help auditors to auditthe controls. The last item is having some system in place to storeand organize data, and make it easier to access information both bymanagers and auditors.
These are all important aspects to the performance audit andinternal control worlds, both publicly and in governmentalentities.
