Internal control over financial reporting is a process designed and maintained by management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”). It encompasses the processes and procedures management has established to:
a) Maintain records that accurately reflect the company’s transactions.
b) Prepare financial statements and footnote disclosures for external purposes and provide reasonable assurance that receipts and expenditures are appropriately authorized.
c) Prevent or promptly detect unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
