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Internal Control over Financial Reporting
Practical Law Glossary Item 5-382-3554 (Approx. 2 pages)
Glossary
Internal Control over Financial Reporting
A process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and put in place by the company's board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of the company's financial reporting and preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that:
- Pertain to the maintenance of records that accurately and fairly reflect the transactions and dispositions of the assets of the issuer in reasonable detail.
- Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of the company's management and directors.
- Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
(Rule 13a-15(f), Exchange Act.)