Inadequate Internal Controls over Financial Reporting (ICFR)

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Internal Control over Financial Reporting (ICFR)

Under federal law, publicly traded companies are responsible for devising and maintaining a system of internal accounting controls sufficient to reasonably assure that:

  • transactions are executed in accordance with management authorization;
  • transactions are recorded as necessary to: 1) permit preparation of financial statements in conformity with GAAP and 2) maintain accountability for assets;
  • access to assets is permitted only in accordance with management authorization; and
  • recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken regarding any differences.