The Five components of COSO namely Monitoring, Information and Communication, Control Activities, Risk Assessment and Control Environment form the pillars for evaluating internal controls in an organzation. Our topic for discussion is "Information and Communication" which is an important COSO component. Let us discuss "Information" and "Communication" seperately, to understand its true meaning for internal control evaluation.

Information - Information is concerned with providing information to the right people on time to ensure that they are able to perform their duties in an efficient and effective manner. In a broad sense, management should receive information / reports on the entity's performance so that they are able to measure established objectives. Such information might include operational reports, financial reports, which are used by a company's management.

Communication - Communication first concerns itself with adequacy of communication within the entity and secondly with effectiveness of communication with customers, suppliers and other external parties. Effective communication in a broad sense means flowing down, up and across the organization. They key to effective and efficient communication in any organization is a clear message by the top management that control resposnisbilities are to be given top priority.

More on Internal Controls & COSO >>

>> Control Environment
>> COSO Internal Control Process
>> Impact of a Significant Deficiency
>> Real Time Disclosures under SOX