Discuss the following statement with regard to internal control over financial reporting within publicly traded companies. Evaluate the importance of this issue from the viewpoint of various interested parties (shareholders, managers, external auditors, regulators, potential investors, etc.).

The PCAOB notes in its release (Auditing Standard March 2004 United States) that: ‘The primary benefit [of an effective internal control structure] . . . is to provide the company, its management, its board and audit committee, and its owners and other stakeholders with a reasonable basis on which to rely on the company’s financial reporting.’