You are the Company Secretary of Super Chef Ltd. Shirley, the newly appointed CEO of Super Chef Ltd. is not clear about the concept of internal control and her role and responsibilities with regard to internal controls o

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) defines Internal Control as a process, effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance. According to COSO an organization needs to focus on separate aspects of internal control for achievement of the following objectives: Effectiveness and efficiency of the entities operations. Reliability, limitations and transparency of financial reporting. Compliance with applicable laws and regulations. The chief executive officer is ultimately responsible and should assume "ownership" of the system. More than any other individual, the chief executive sets the "tone at the top" that affects integrity and ethics and other factors of a positive control environment. In a large company, the chief executive fulfils this duty by providing leadership and direction to senior managers and reviewing the way they're controlling the business. Senior managers, in turn, assign responsibility for establishment of more specific internal control policies and procedures to personnel responsible for the unit's functions. In a smaller entity, the influence of the chief executive, often an owner-manager is usually more direct. In any event, in a cascading responsibility, a manager is effectively a chief executive of his or her sphere of responsibility. Of particular significance are financial officers and their staffs, whose control activities cut across, as well as up and down, the operating and other units of an enterprise.