What are Internal Controls?
An internal control is any action taken by management to enhance the likelihood that established objectives and goals will be achieved. Internal controls are required to:
- Protect Assets
- Ensure Records are Accurate
- Promote Operational Efficiency
- Encourage Adherence to Policies, Laws, and Regulations
Generally, controls are of two types:
Preventative Controls: Procedures implemented to help prevent an unwanted outcome. Example: Requiring the use of computer passwords to restrict unauthorized access to programs and information.
Detective Controls: Procedures performed to find errors or irregularities after they have occurred. Example: Supervisors reviewing monthly purchasing card statements to verify that no inappropriate purchases were made.
Who is responsible for internal controls?
Everyone. Although it is ultimately ³Ô¹Ï¹ÙÍø management's responsibility to ensure that controls are in place, everyone plays a part in ³Ô¹Ï¹ÙÍø's internal control system. Every employee has some responsibility for making the internal control system function. Therefore, all ³Ô¹Ï¹ÙÍø employees need to be aware of the concept and purpose of internal controls.
Helpful Audit CheckList
We have included an audit checklist on this website to provide departments with a guide as to what will be included in audit test work during the course of a departmental internal audit.
Internal Control Training
For further information or training on internal controls, contact our office at ext. 7160.