However, It is just as important for us to provide a workplace where our employees are protected from the life-destroying consequences of fraud and embezzlement. Office feels that every local government should have internal controls appropriate to each situation. Often, this will require involvement by the governing body of the local government to provide adequate controls and oversight. The importance of reevaluating internal controls has been brought to our attention on several occasions when we have heard of local government officials being accused of misappropriating public funds. Every time this happens, the level of trust our citizens have for government declines just a little bit.
Internal controls are the responsibility of management.
In fact, for internal controls to be effective, management must set a favorable control environment. A Local Government Managers Guide , pg. The accounting profession has emphasized the importance of internal controls for many decades. However, the profession has recently reemphasized the importance of internal controls and has established a new framework for evaluating and establishing internal controls. This report is referred to as the COSO Report.