Identifying significant processes which have a direct correlation with internal controls is an important task for the management. Once the management has identified significant accounts and the relevant financial statement assertions, management needs to identify the various significant processes. What are these significant processes, how do you identify significant processes in your organization. Significant processes are those processes over major classes of transactions that directly affect accounting, disclosures and/or assertions. What then does the management need to know about significant processes. Here are a few pointers.

- Management should have an understanding of how transactions originate. How are they recorded, processed and reported. In short, it helps to know the flow of transactions within a process.

- Once management has a basic understanding of the process, management should identify the key areas where a mis-statement related to a financial statement assertion could occur.

- Management should identify controls which could help in mitigating the mis-statements identified.

- The final thing management should do is take steps to implement the controls identified. Controls should balance risks identified with related costs.

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