What are Internal Controls?
Internal controls, in the broadest sense, include the activities and procedures adopted by management to help meet their goals. Internal controls include processes for planning, organizing, directing, controlling, and reporting on the organization’s operations. Internal controls are an integral component of an organization’s operations that provide reasonable assurance that the following objectives are being achieved:
• Effectiveness and efficiency of operations
• Reliability of financial reporting
• Compliance with applicable laws and regulations
What are the Components of Internal Controls?
Management is responsible for developing and maintaining internal control activities that comply with the following five interrelated components:
A. Control Environment
B. Risk Assessment
C. Control Activities
D. Information and Communications
Return to Home