What is Internal Control?
Internal control refers to the policies, procedures, and systems that an organization puts in place to ensure that its operations are effective and efficient, its financial reporting is accurate and reliable, and it complies with applicable laws and regulations.
Internal control systems are designed to safeguard an organization’s assets, prevent and detect fraud, errors, and other irregularities, and ensure the accuracy and completeness of its financial records. The internal control framework typically includes processes for risk assessment, control activities, information and communication, and monitoring.
Effective internal control helps an organization achieve its objectives and reduce the risk of financial loss or reputational damage. It is an essential component of good governance, risk management, and compliance management.