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Internal control systems

Strategic capabilities
Internal control

1.1 Internal control definitions

 Controls – attempt to ensure that risks are minimised.

 An internal control system – network of systems established in an
organisation to provide reasonable assurance that organisational
objectives will be achieved.

 Internal management control – procedures and policies in place to
ensure that company objectives are achieved.

NB The control procedures and policies provide the detailed controls implemented
within the company.

1.2 Objectives of internal control systems

An internal control system is to ensure, as far as practicable:

 the orderly and efficient conduct of its business, including
adherence to internal policies

 the safeguarding of assets of the business

 the prevention and detection of fraud and error

 the accuracy and completeness of the accounting records

 the timely preparation of financial information.

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