The four basic elements in a control system: We select a specific characteristic because a correlation exists between it and how the system is performing. The characteristic can be the output of the system during any stage of processing or it may be a condition that is the result of the system.
In Hellenistic Egypt there was a dual administration, with one set of bureaucrats charged with collecting taxes and another with supervising them. Definitions[ edit ] There are many definitions of internal control, as it affects the various constituencies stakeholders of an organization in various ways and at different levels of aggregation.
Under the COSO Internal Control-Integrated Framework, a widely used framework in not only the United States but around the world, internal control is broadly defined as a process, effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance.
COSO defines internal control as having five components: Control Environment-sets the tone for the organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control.
Risk Assessment-the identification and analysis of relevant risks to the achievement of objectives, forming a basis for how the risks should be managed Information and Communication-systems or processes that support the identification, capture, and exchange of information in a form and time frame that enable people to carry out their responsibilities Control Activities-the policies and procedures that help ensure management directives are carried out.
Monitoring-processes used to assess the quality of internal control performance over time.
The COSO definition relates to the aggregate control system of the organization, which is composed of many individual control procedures. Discrete control procedures, or controls are defined by the SEC as: A control may exist within a designated function or activity in a process.
Controls have unique characteristics — for example, they can be: Controls within a process may consist of financial reporting controls and operational controls that is, those designed to achieve operational objectives.
Control itself exists to keep performance or a state of affairs within what is expected, allowed or accepted. Control built within a process is internal in nature. It takes place with a combination of interrelated components — such as social environment effecting behavior of employees, information necessary in control, and policies and procedures.
Internal control structure is a plan determining how internal control consists of these elements. Internal controls help ensure that processes operate as designed and that risk responses risk treatments in risk management are carried out COSO II.
In addition, there needs to be in place circumstances ensuring that the aforementioned procedures will be performed as intended: Roles and responsibilities in internal control[ edit ] According to the COSO Framework, 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. Also, all personnel should be responsible for communicating upward problems in operations, non-compliance with the code of conduct, or other policy violations or illegal actions.
Each major entity in corporate governance has a particular role to play: Management[ edit ] The Chief Executive Officer the top manager of the organization has overall responsibility for designing and implementing effective internal control. More than any other individual, the chief executive sets the " tone at the top " that affects integrity and ethics and other factors of a positive control environment.
In a large company, the chief executive fulfills this duty by providing leadership and direction to senior managers and reviewing the way they're controlling the business. Senior managers, in turn, assign responsibility for establishment of more specific internal control policies and procedures to personnel responsible for the unit's functions.
In a smaller entity, the influence of the chief executive, often an owner-manager, is usually more direct. In any event, in a cascading responsibility, a manager is effectively a chief executive of his or her sphere of responsibility.
Of particular significance are financial officers and their staffs, whose control activities cut across, as well as up and down, the operating and other units of an enterprise.
Board of directors[ edit ] Management is accountable to the board of directors, which provides governance, guidance and oversight. Effective board members are objective, capable and inquisitive. They also have a knowledge of the entity's activities and environment, and commit the time necessary to fulfil their board responsibilities.A countermeasure is a strp planned and taken in opposition to another act or potential act.
Physical Security Countermeasures.
The following countermeasures address physical security concerns that could affect your site(s) and equipment. Internal control, as defined in accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies.
A broad concept, internal control involves everything that controls risks to . An organization or organisation is an entity comprising multiple people, such as an institution or an association, that has a collective goal and is linked to an external environment.  [ citation needed ].
How to Write Procedures to Increase Control When used to describe a procedure or process it means that the procedure only cares about getting its own work accomplished and it organization, and delivering the ultimate control management is really seeking.
MGMT STUDY. PLAY. What influences ethical behavior in an organization? practices and continous improvement.
Installing information and operating systems. Trying rewards to Achievement of Key strategic Targets. Shaping corporate culture to fit strategy.
company policies; operating approaches; and the ways of dealing with employees. Control, or controlling, is one of the managerial functions like planning, organizing, staffing and caninariojana.com is an important function because it helps to check the errors and to take the corrective action so that deviation from standards are minimized and stated goals of .