© Matti Mattila, CPFA, CISA, CIA

Questionaire #2: Financial reporting & Control Environment

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What information we want?

We want information about behavioural circumstances [within an organization] affecting provision stakeholders with proper financial information by the organization itself. In the ECAR document we can find following things worth considering.
A01) Expressions of commitment by the board of directors or other such body or person in favour of presentation and disclosure of true and fair view in the financial statements.
A02) General respect of shareholders', business partners' and other stakeholders' rights by those in charge of providing financial information that stakeholders need in protecting their financial interests.
A03) Existence of incorruptible truthful employees that are working in the financial reporting.
A04) The financial reporting process's managers' motivation, courage, and will to learn, seize and resolve important financial reporting problems.
A05) Use of sanctions and removal of temptations in order to prevent and stop wrong or untruthful financial reporting.
A06) Susceptibility of management's fraud in financial reporting.
A07) Staff's willingness and possibility to report safely (e.g. anonymously) about breaches of rules in financial reporting practices.
A08) The independent auditor's input compared with the board's and management's input for correctness of financial information.
A09) The things that the staff is most worried in the control environment in the organization's financial reporting process.