What is internal control?
"The auditor's definition of internal control is a process, effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: 1) reliability of financial reporting, 2) compliance with applicable laws and regulations, 3) effectiveness and efficiency of operations, and 4) safeguarding of assets." (COSO www.coso.org)
A broad definition of internal control "can be described as any action taken by an organization to help enhance the likelihood that the objectives of the organization will be achieved". (enotes.com)
What is the purpose of internal control?
The purposes are stated above as part of the definition, but on a more practical level, the purpose is to have a system of checks and balances that works within a company on a consistent basis which is used by every person and every system to promote accuracy, continuity and to minimize fraud, errors and omissions.
Why is internal control important?
Good internal ...
The 671 word cited solution provides comprehensive solutions to a good understanding of the purpose and importance of internal controls within a company. The accounting process for internal control is also detailed.