Analytical procedures: management tools for monitoring controls

Abstract

Discusses whether management, as a part of its duties, designs and maintains a system of internal control. Shows that the COSO report (“Internal Control ‐ Integrated Framework”, 1992) emphasizes that management is responsible for the design and operation of internal control; as part of its responsibilities for controlling, management monitors the system of internal control. States that analytical procedures are tools which management can use to monitor controls. The methods highlight which operating or financial data might contain errors. Notes that the presence of errors indicates that controls are not effective. Explores analytical procedures which management might use in monitoring controls. Says that some analytical procedures are straightforward, requiring few calculations and relatively few historical data. Posits that other techniques are more complex, using statistical models and more historical information. Provides practical guidance on applying analytical procedures.

Citation

Lee, M. and Colbert, J.L. (1997), "Analytical procedures: management tools for monitoring controls", Management Decision, Vol. 35 No. 5, pp. 392-397. https://doi.org/10.1108/00251749710173760