The Center for Audit Quality has released a new Guide to Internal Control Over Financial Reporting to explain to investors and the general public the process used by U.S. public companies to enhance the reliability of their financial statements by reducing the risk of material errors or misstatements.
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“An effective system of internal control over financial reporting is one of the bedrocks of the financial reporting system underpinning U.S. securities markets,” said CAQ executive director Cindy Fornelli in a statement. “Investors and others interested in the capital markets will value the Guide’s high-level perspective on the process that helps reduce financial reporting risks and produce accurate financial statements.”
The Guide to ICFR introduces the financial reporting controls that are designed to provide reasonable assurance that the company’s financial statements are reliable and prepared in accordance with generally accepted accounting principles. The publication describes company management’s responsibility for implementing an effective internal control process and the audit committee’s oversight of ICFR as part of its financial reporting responsibilities.
The publication is the latest in a series of introductory guides from the CAQ on auditing and capital market topics of interest to investors. All of the guides are available for free in the Publications section of the CAQ’s Web site.