Internal control is the whole system of controls, financials or otherwise, established by the management in order to carry on the business of the enterprise in an orderly manner, safeguard its assets and secure as far as possible the accuracy and reliability of its records. The internal control system also includes the internal check and internal audit. The scope of internal control extends beyond the accounting controls and includes all operational control such as operational controls, quality control, budgetary control, working standards and other periodic reporting.
Objectives of internal control system
Internal control system refers to all the policies and procedures adopted by the management of the entity to attain the objectives of an organization. It aims at,
v All the transactions are recorded as per the management vision.
v Every transaction promptly entered in the period in which it is executed.
v Make sure that the assets are safeguarded from unauthorized access, use or disposition
v The recorded assets are compared with the existing assets at reasonable intervals and appropriate action is taken with regard to any differences.
Internal control system for an organization ensuring the orderly and efficient conducting of business.
Internal control procedures
Internal control procedures are those policies and procedures in addition to the control environment, established by the management to achieve entity’s specific objectives, these includes,
It is a means by which an organization's resources are directed, monitored, and measured. It plays an important role in detecting and preventing fraud and protecting the organization's resources, both physical (e.g., machinery and property) and intangible (e.g., reputation or intellectual property such as trademarks.
Internal control objectives relate to the reliability of financial reporting, timely feedback on the achievement of operational or strategic goals, and compliance with laws and regulations. At the specific transaction level, internal control refers to the actions taken to achieve a specific objective. It reduces process variation, leading to more predictable outcomes. Emirates Chartered Accountants Group assists companies for laying down a clear cut internal control system for achieving their common goal. You may reach at email@example.com