What is Internal Control?
Original definition:
“ Internal Control comprises the plan of organization and all the coordinate methods and measures adopted within a business to safeguard its assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherences to prescribed managerial policies” 1
1Source: Internal Control, American Institute of Accountants, 1949
Current Definition:
”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:
Effectiveness and efficiency of operations.
Reliability of financial reporting
Compliance with applicable laws and regulations.” * 2
2Source: Internal Control Integrated Framework, September 1992, Committee of Sponsoring Organization of the Treadway Commission, page 9
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