Conceptual Aspects of Internal Control Evaluation
by KENNETH W. STRINGER Partner, Executive Office
Presented before the Annual Meeting of American Institute of Certified Public Accountants, New York—September 1970
IN PLANNING this program we were somewhat concerned that making
a presentation on internal control to an audience of practicing CPAs might seem like "carrying coals to Newcastle." A similar concern was felt initially by the Committee on Auditing Procedure when this subject was placed on its agenda.
Our committee soon became convinced, however, that there are sufficient
unresolved questions and problems in this area to justify reconsideration
and issuance of a pronouncement. We hope that those in the audience
today will feel the same way about this program.
Reconsideration of internal control by the committee was motivated largely by two reasons :
First, the length of time elapsed since the last pronouncement on this subject, coupled with several developments in business and in the profession
in the meantime; second, some indication of a need to amplify and clarify concepts in the light of experience with the existing pronouncements.
Nevertheless, experience has demonstrated that the rationale and basic
concepts comprehended in those pronouncements are fundamentally sound, and consequently no radical departures will be proposed on this program, despite the reference to "new directions" in the program brochure.
Some of the developments in business and in the profession in the last several years and their relation to internal control will be mentioned briefly.
The increasing trend for CPAs to provide management advisory or consulting services involving the review, evaluation, and improvement of management information systems increases the need for clearly distinguishing
between these extended services and those required for compliance
with the auditing standard relating to internal control.
The rapidly increasing use of computers for processing accounting