The information and communication part includes the accounting system. The accounting system, whether manual or computerized, is the methods and records set up to record, process, summarize, and report the firm’s transactions. It must maintain accountability for all the related assets and liabilities.

• Can the system identify and record all valid transactions? This objective concerns the financial statement assertions of existence or occurrence and completeness.
• Does it describe on a timely basis the transactions in sufficient detail to permit proper classification of transactions for financial reporting? This objective concerns the financial statement assertion of presentation and disclosure.
• Can it measure the value of transactions in a manner that permits recording their proper monetary value in the financial statements? This objective concerns the financial statement assertion of valuation or allocation.
• Are transactions recorded in the proper accounting period? This objective concerns the financial statement assertions of existence or occurrence and completeness.
• Can it present the transactions and related disclosures in the financial statements? This objective concerns the financial statement assertions of rights and obligations and presentation and disclosure.

Communication means giving a clear understanding of each person’s responsibilities for internal control. This would include reporting exceptions to an appropriate higher level within the entity. Communication takes such forms as policy manuals, accounting and financial reporting manuals, and memoranda

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