What do we know about internal control of basic sanitation companies?

Abstract

The study investigated the internal control practices and deficiencies in companies from the Water and Basic Sanitation sector, using the COSO Methodology as a reference. Companies listed in the sector from the period between 2015 and 2022 were selected, totaling 236 observations of control practices and deficiencies. The data was collected from the Reference Forms available on the B3 website. A highlighted aspect was the need for significant improvements, particularly in the Information Technology area, identified as one of the main sources of internal control deficiencies. The solutions proposed by the companies included the removal of privileged access and the establishment of periodic monitoring. Additionally, it is essential to improve communication and information processes. Among the main points, the classification of deficiencies revealed that issues related to balance sheet accounts, IT-related deficiencies, and the lack of defined manuals and policies were the most common. This highlights the importance of focusing efforts on these areas to strengthen internal control as a whole. It is suggested that future research investigate the impact of internal control deficiencies on the financial and operational performance of companies.

Key words: internal control; COSO; internal control deficiencies.