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Definition of Internal Control measures with examples.

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What does the term internal control mean? Provide examples of internal control commonly used my management.

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Solution Summary

Internal Control is defined as measures a business uses to ensure that they have identified areas where they may be exposed to risks, they have measures in place to minimize those risks, and plans in place to monitor their business activities to ensure they will identify when they are not meeting their objectives. Internal Control can be divided into two methods; preventative and detective.

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Internal Control and Management Use of it.

Basic Definition of Internal Control

"Proper risk management and internal control help organizations understand the risks they are exposed to, put controls in place to counter threats, and effectively pursue their objectives. They are therefore an important aspect of an organization's governance, management, and operations." Source: https://www.ifac.org/global-knowledge-gateway/risk-management-internal-control?discussions

Generally, business defines controls within two types: Preventative & Detective

Preventative:

These types of controls are intended to prevent errors and irregularities from occurring. These types of controls are considered to be ...

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