View source for Principle 14 - Communicate Internally


14.01 Management should internally communicate relevant and quality
information, including objectives and responsibilities for internal
control, necessary to support the functioning of the internal control
system.

Communication Throughout the Entity

14.02 Management communicates relevant and quality information
throughout the entity using established reporting lines. Communication
is the continual, iterative process of providing, sharing, and obtaining
necessary information. Quality information is communicated down, across,
up, and around reporting lines to all levels of the entity.

14.03 Management communicates relevant and quality information down and
across reporting lines to enable personnel to understand and perform key
roles in achieving objectives, addressing risks, and supporting the
internal control system. In these communications, management assigns the
internal control responsibilities for key roles. Communications support
the functioning of all five components of internal control and the
achievement of the entity’s objectives. Communications may include legal
and regulatory requirements, ethical values, the entity’s objectives,
identified risks, policies and procedures that support personnel in
performing their internal control responsibilities, and the results of
monitoring activities that may include corrective actions to remediate
internal control deficiencies.

14.04 Management obtains relevant and quality information about the
entity’s business processes that flows up the reporting lines from
personnel to help management achieve the entity’s objectives.
Information communicated by personnel may include internal control
issues; this communication helps management identify internal control
deficiencies and take corrective action.

14.05 The oversight body obtains relevant and quality information that
flows up the reporting lines from management and other personnel.
Information relating to internal control communicated to the oversight
body includes significant matters about adherence to, changes in, or
issues arising from the internal control system. This upward
communication is necessary for the effective oversight of internal
control.

14.06 Personnel use separate reporting lines to go around upward
reporting lines when these lines are compromised. Laws and regulations
may require entities to establish separate lines of communication, such
as whistleblower and ethics hotlines, for communicating confidential
information. Management informs employees of these separate reporting
lines, how they operate, how they are to be used, and how the
information will remain confidential.

Appropriate Methods of Communication 

14.07 Management selects appropriate methods for communicating
internally. Management considers a variety of factors in selecting an
appropriate method of communication. Some factors to consider follow:

*   Audience - The intended recipients of the communication.

*   Nature of information - The purpose and type of information being
    communicated.

*   Availability - Information readily available to the audience when
    needed.

*   Cost - The resources used to communicate the information.

*   Legal or regulatory requirements - Requirements in laws and
    regulations that may impact communication.

14.08 Based on consideration of the factors, management selects
appropriate methods of communication. Management evaluates the entity’s
methods of communication on a periodic and ongoing basis so that the
organization has the appropriate tools to communicate quality
information throughout the entity on a timely basis.

{{Principles}}

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