Economic Themes (2012) 50 (2) 2, 151-166
Jovan Krstić, Milica Đorđević
Abstract: In achieving their business activities enterprises are constantly exposed to risk. One of the most important mechanisms for risk reduction is internal control as a set of policies and procedures established by management in order to realize enterprise’s objectives. In this paper, we point out development of new paradigm of internal control – risk based internal control. Therefore, we start from revised COSO model which not represents only addition of traditional risk mangement model but enables timely identification, management and monitoring enterprise’s risk in contemporary business environment. Adequately designed and implemented system of internal control which is based on risk is in function of achieving objectives related to effectiveness and efficiency of enterprise, reliability of financial reporting and compliance with appropriate regulations.
Keywords: internal control; risk; Risk Management; Traditional COSO model of internal control; revised COSO model of internal control; provisions – sections 302 and 404 of SOX
INTERNAL CONTROL AND ENTERPRISE RISK MANAGEMENT – FROM TRADICIONAL TO REVISED COSO MODEL
Jovan Krstić, Milica Đorđević
Abstract: In achieving their business activities enterprises are constantly exposed to risk. One of the most important mechanisms for risk reduction is internal control as a set of policies and procedures established by management in order to realize enterprise’s objectives. In this paper, we point out development of new paradigm of internal control – risk based internal control. Therefore, we start from revised COSO model which not represents only addition of traditional risk mangement model but enables timely identification, management and monitoring enterprise’s risk in contemporary business environment. Adequately designed and implemented system of internal control which is based on risk is in function of achieving objectives related to effectiveness and efficiency of enterprise, reliability of financial reporting and compliance with appropriate regulations.
Keywords: internal control; risk; Risk Management; Traditional COSO model of internal control; revised COSO model of internal control; provisions – sections 302 and 404 of SOX
