"Internal control, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies."
The process of establishing policies and procedures to ensure the accuracy and reliability of financial information, and conducting internal and external audits to review compliance with those policies and identify areas for improvement.
Introduction to Internal Controls: A foundational understanding of internal controls and their importance in financial management.
Types of Internal Controls: A discussion of the various types of internal controls, including preventive, detective and corrective controls.
Risk Assessment: The process of identifying and evaluating potential risks within an organization.
Control Activities: The policies and procedures put in place to mitigate identified risks.
Information and Communication: How information flows within an organization and the importance of effective communication.
Monitoring: The ongoing process of monitoring and evaluating internal controls to ensure they are effective.
Audit Objectives: The goals that must be achieved during an audit of an organization's financial activities.
Audit Evidence: The documentation and other evidence that auditors rely on to confirm the accuracy of financial statements.
Materiality and Significance: The importance of identifying and reporting significant financial events.
Audit Sampling: A technique used by auditors to draw conclusions about the accuracy of a larger population based on a sample of data.
Fraud: The intentional deception or misrepresentation of financial information.
Compliance: Ensuring that an organization is compliant with all relevant laws and regulations.
Audit Reports: The final report provided by auditors that summarizes their findings and recommendations.
Sarbanes-Oxley Act: A federal law passed in 2002 that sets standards for financial reporting and disclosure.
Internal Controls and Auditing in Public Administration: How internal controls and auditing apply to governmental financial management.
Preventive Controls: These are measures put in place to prevent fraud or errors. These controls limit the opportunity for fraud or error to occur by restricting access to sensitive information or financial resources.
Detective Controls: These controls are designed to detect fraud or errors after they have occurred. This helps to identify and rectify any potential issues that have arisen.
Corrective Controls: These controls are implemented after fraud or errors have been detected. They are designed to rectify issues and prevent them from occurring again.
Directive Controls: These controls ensure compliance with policies, laws, and regulations. They help to ensure that employees do not violate any rules or policies set forth by the organization.
Informational Controls: These are measures put in place to ensure that information is accurate and complete. They help to ensure that information is not falsified or tampered with.
Internal Auditing: This is an independent internal review of an organization's financial systems and processes. It helps to identify risks and make recommendations for improvement.
External Auditing: This is an independent review of an organization's financial statements by an external audit firm. The purpose is to provide assurance to stakeholders that the financial statements are accurate and complete.
Performance Auditing: This is an assessment of an organization's performance, including financial management. It aims to identify ways to improve the organization's effectiveness and efficiency.
Compliance Auditing: This is an assessment of an organization's compliance with laws and regulations. It helps to ensure that the organization is adhering to legal requirements.
Operational Auditing: This is an assessment of an organization's operational processes. It helps to identify ways to improve efficiency and effectiveness.
Information System Auditing: This is an assessment of an organization's information systems to ensure that they are secure, reliable, and effective.
"A broad concept, internal control involves everything that controls risks to an organization."
"It plays an important role in detecting and preventing fraud and protecting the organization's resources."
"It protects the organization's resources, both physical (e.g., machinery and property) and intangible (e.g., reputation or intellectual property such as trademarks)."
"At the organizational level, internal control objectives relate to the reliability of financial reporting, timely feedback on the achievement of operational or strategic goals, and compliance with laws and regulations."
"At the specific transaction level, internal controls refer to the actions taken to achieve a specific objective (e.g., how to ensure the organization's payments to third parties are for valid services rendered)."
"Internal control procedures reduce process variation, leading to more predictable outcomes."
"Internal control is a key element of the Foreign Corrupt Practices Act (FCPA) of 1977 and the Sarbanes-Oxley Act of 2002, which required improvements in internal control in United States public corporations."
"Internal controls within business entities are also referred to as operational controls."
"The main controls in place are sometimes referred to as 'key financial controls' (KFCs)."
"It is a means by which an organization's resources are directed, monitored, and measured."
"It is a process for assuring of an organization's objectives in operational effectiveness and efficiency."
"It is a process for assuring of an organization's objectives in ... reliable financial reporting."
"It is a process for assuring of an organization's objectives in ... compliance with laws, regulations, and policies."
"Internal control procedures reduce process variation, leading to more predictable outcomes."
"It plays an important role in ... protecting the organization's resources, both physical (e.g., machinery and property)."
"It plays an important role in ... protecting the organization's resources, both intangible (e.g., reputation or intellectual property such as trademarks)."
"The Sarbanes-Oxley Act of 2002, which required improvements in internal control in United States public corporations."
"It is a process for assuring of an organization's objectives in ... everything that controls risks to an organization."
"It is a means by which an organization's resources are directed, monitored, and measured."