Internal control

The internal control of a company are an important part of it’s overall  operations .A strong internal control system will provide many benefits to a company including :

• Lowe external audit costs


• Better control over the assets of the company  and ,


• Reliable information for use in decision – making

A company with weak internal controls is putting itself at risk for employee risk, loss of control over the information relating to operations, and other inefficiencies in operations and decision making that can damage its business.

Internal controls is method ,or progress ,that is carried out by an entity’s board of directors , management and other personnel that is designed to provide reasonable assurance  that objectives in the following three categories will be achieved:

• Effectiveness and efficiency of operations ,or the extent to which the company’s operations objectives are being achieved. These include performance goals, profitability goals and safeguarding of resources.


• Reliability of financial reporting,   including operations of all published financial information. in addition to the full set of financial statements, this includes interim and condensed financial statements and any selected financial data from those statements ,such as earning releases, that are reported publicity.


• Compliance with applicable laws and regulations, encompassing  all laws and regulations to which the company is subject.

Thus, internal control is effective if members of management have reasonable assurance that they understand the extent to which 1) the entities operational objectives are achieved    ;2)published financial information is reliability prepared  and 3) applicable laws and regulations are complied with .

As a process, internal control is a means to an end, not an end itself. Internal controls can provide reasonable assurance but not a guarantee, that these objectives will be met. people, not policy manuals or forms , carry out internal control.

I hope I have clarified the concept .. What is your comment on that term and what is your opinion?