Kral Ussery LLC, Certified Public Accountants
TX Office: (817) 416-6842
NV Office: (702) 565-2727

Kral Ussery FAQs

Industry FAQs

Find answers to questions about Candela Solutions and our industry information.

Management's Annual Report on Internal Control Over Financial Reporting (ICFR)

What is the purpose of the evaluation of ICFR?




Back to Top
 

  What is the purpose of the evaluation of ICFR?

While periodic evaluations of internal control over financial reporting (ICFR) is advisable for all sizes and types of organization, those with registered debt or equity with the US Securities and Exchange Commission (SEC) must perform this annually. The purpose of the evaluation is to provide management with a reasonable basis for its annual assessment as to whether any material weaknesses in ICFR exist as of the end of the fiscal year. The concepts of reasonable judgment, scalability, and risk are central themes.


Since this is primarily the responsibility of financial reporting personnel, why should I care? 

SEC staff advocates a top-down, risk-based approach to identify risks and controls, and in determining evidential matter necessary to support the assessment. This approach explicitly includes IT general controls and entity-level controls, which encompasses a wide range of employees from multiple departments. A company’s culture, as well as its process for attracting, developing, and retaining employees, are examples of entity-level control areas that have a pervasive effect on financial reporting objectives and thus need to be considered in the ICFR evaluation process. Hence, this is not simply an exercise of the CFO and controllership functions, but rather involves the inputs and efforts of many people.



Get In Touch With Us

Governance Issues TM

A Newsletter to Help You
Protect & Grow Shareholder Value

Free Subscription     View Previous Articles
IPO FAQs | IPO Process | Detailed IPO Process Steps
Home | Privacy Policy | Disclaimer | Site Map

Copyright © , Kral Ussery LLC, Certified Public Accountants All Rights Reserved

Web Presence By Netphoria Inc