The acceleration of accounting failures in recent decade has given rise to the necessity of establishing new rules, standards, codes and new guidelines in financial reporting. While this new rules and standards are rooted from different sources, they are all common in one principle sense: Effective internal control is the most prominent constituent of good governance.
The importance of public acceptance of internal control is well defined in the related guides and frameworks. In this study we aim at comparing the process of evaluating Internal Control over Financial Reporting (ICFR) with the processused for assessing internal control system in financial auditing.Respecting the matter as new in this paper, general considerations relevant to application of the ICFR requirement are presented through a five-step process (Planning, Assessment of controls at entity level, Assessment of controls at process level, Testing control design and effectiveness of operations at transactions level, and Reporting). And in such a manner to cover not only the research goal, but also to represent an effective process to both managers and auditors by which they could be able to evaluate ICFR.
The research findings indicate conformity of financial auditing process for assessing internal control and the five-step process used for evaluating ICFR.