Internal Control

Internal control, as definied by 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.

It is a means by which an organization's resources are directed, monitored, and measured. It plays in an important role in detecting and preventing fraud and protecting the organization's resources, both physical (e.g. machinery and property) and intangibles (e.g. reputation or intellectual property such as trademark).

At the organizational level, internal control objectives relate to the reliability of financial reporting, timely feedback on the achievement of operational or strategic goals, and compliance with laws and regulations. At the specific transaction level, internal controls refers to the actions taken to achieve a specific objective (e.g. how to ensure the organization's payments to third parties are for valid services rendered). Internal control procedures reduce process variation, leading to more predictable outcomes. Internal control is a key element of the Foreign Corrupt Practices Act (FCPA) of 1977 and the Sarbanes-Oxley Act of 2002, which required improvements in internal control in the United States publicly-listed corporations. Imternal controls within business entities are also referred to as operational controls. The main controls in place are sometimes referred to as "key financial controls" or KFCs.

Internal controls have existed in ancient times. In Hellinistic Egypt, there was a dual administration, with one set of bureaucrats charged with collecting taxes and another with supervising them. In the Republic of China (Taiwan), the Supervising Authority, one of the five branches of government, is an investigatory agency that monitors the other branches.

x---------x

This post is sponsored by Adidas.

Comments

Mariology

Mariology is the theological study of Mary, the mother of Jesus. Mariology seeks to relate doctrine or dogma about Mary to other doctrines of the faith, such as those concerning Jesus and notions about redemption, intercession, and grace. Mariology aims to place the role of the historic Mary in the context of scripture, tradition and the teachings of the Church on Mary. In terms of social history, Mariology may be broadly defined as the study of devotion to and thinking about Mary throughout the history of Christianity. There exist a variety of Christian (and non-Christian) views about Mary as a figure ranging from the focus on the veneration of the Blessed Virgin Mary in Roman Catholic Mariology to criticisms of "mariolatry" as a form of idolatry. The latter would include certain Protestant objections to Marian devotion. There are also more distinctive approaches to the role of Mary in Lutheran Marian theology and Anglican Marian theology. As a field of theology, the most ...

Stoichiometry

Stoichiometry refers to the relationship between the quantities of reactants and products before, during, and following chemical reactions. Stoichiometry was founded on the law of conservation of mass where the total mass of the reactants equals the total mass of the products, leading to the insight that the relations among qualities of reactants and products typically form a ratio of positive integers. This means that if the amounts of separate reactants are known, then the amount of the product can be calculated. Conversely, if one reactant has a known quantity and the quantity of the products can be empirically determined, then the amount of other reactants can also be calculated. This is illustrated in this example, where the balanced equation is: CH4 + 2O4 -----> CO2 + 2H2O Here, one molecule of methane reacts with two molecules of oxygen gas to yield one molecule of carbon dioxide and two molecules of water. This particular chemical...

Ecology

Ecology is the study of the relationships among living organisms, including humans, and their physical environment. Ecology considers organisms at the individual, population, community, ecosystem, and biosphere level. Ecology overlaps with the closely related sciences of biogeograohy, evolutionary biology, genetics, ethology, and natural history. Ecology is the branch of biology, and is the study of abundance, biomass, and distribution of organisms in the context of the environment. It encompasses life processes, interactions and adaptations; movement of materials and energy through living communities; successional development of ecosystems; cooperation, competition, and predation with and between species; and patterns of biodiversity and its effect on ecosystem processes. Ecology has practical applications in conservation biology, wetland management, natural resource management (agroecology, agriculture, forestry, agroforestry, fisheries, mining, tourism), urban planning (urban e...

Search This Blog