Who Should Be Involved at Which Stage of the Internal Control?
Who should be involved in the setup of an internal control system depends on the size and complexity of the organization. In general, the following individuals and departments may be involved:
Top management: Top management should be involved in establishing the organization’s objectives, identifying risks, and developing control activities. They should also provide leadership and support for the implementation of the internal control system.
Finance department: The finance department should be involved in the design and implementation of financial controls, such as those related to cash handling, financial reporting, and budgeting.
Internal audit department: The internal audit department should be involved in assessing the effectiveness of the internal control system and identifying areas for improvement.
IT department: The IT department should be involved in the design and implementation of IT controls, such as those related to data security, system access, and backups.
Other departments: Other departments within the organization may be involved in the setup of the internal control system, depending on the specific risks and control activities involved. For example, the operations department may be involved in the design and implementation of operational controls, such as those related to inventory management or production processes.
In summary, setting up an effective internal control system requires the involvement of multiple individuals and departments, and should be tailored to the specific needs and risks of the organization. Ongoing monitoring and evaluation are also essential to ensure that the internal control system remains effective over time.