Internal Controls

People don’t always realize but Internal Controls are always about achieving your organization’s objectives.

Definition of Internal Controls:  A process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives.

Internal Controls are everyone’s business.  Everyone in an organization has responsibility for internal control to some extent. Virtually all employees produce information used in the internal control system or take other actions needed to affect control.

The internal auditors measure the effectiveness of internal control through their efforts. They assess whether the controls are properly designed, implemented and working effectively, and make recommendations on how to improve internal control. There are laws and regulations on internal control related to financial reporting.  Most people are aware of those regulations specifically established by Sections 404 and 302 of the Sarbanes-Oxley Act.