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Checklist For Evaluating Internal Controls EssayFor publicly traded companies, the Sarbanes-Oxley Act of 2002 requires an audit of internal controls. The purpose of an internal control evaluation is to esteem risk, which offers auditors a basis for audit planning and provides useful information to worry (Sox Law, 2006). Auditors typically use the five basic components of internal control to approve the constitutional system. According to Louwers, Ramsay, Sinason, and Strawser (2007) the five components to internal controls include control environment, risk assessment, control activities, monitoring, and information and communication. Control environment involves the tone of the organization and includes the integrity, ethical values, and competence of the companys great deal (Louwers, Ramsay, Sinason, Strawser, 2007). essay assessment involves a thorough assessment which identify(s) risks, estimate their significance and likelihood, and consider how to manage the risks (Lo uwers, Ramsay, Sinason, Strawser, 2007).Control activities involve specific actions which help ensure that managements goals and projections are met. Monitoring involves the continuous assessment of internal controls. Information and communication relates to the efficiency and reliability of information and communication regarding how the information is presented and communicated to users. Internal controls entertain the financial information and trading operations of a business. The development and implementation of these controls are typically the responsibility of the business owners. Internal or external audits may be used to gauge the efficiency of internal controls. This audit generally takes place following a standard process of risk measurement regarding the business operations and financial information. The measurement data is most effectively determined by using an internal control checklist.ChecklistPhase One Understand and Document the lymph nodes Internal Control Ob taining an UnderstandingControl Environment EvaluationRisk Assessment EvaluationInformation and Communication AssessmentPhase both Assess the Control RiskPhase Three Test Controls and Review Control RiskReassess ControlsDirection of the Test of ControlsReassess the Control Risk