What is Internal Control

     1. A process designed to ensure reliable financial reporting, effective and efficient operations and              compliance with applicable laws and regulations.

     2. Safeguarding assets against theft and unauthorized use, acquisition or disposal is also part of              internal control.

     3. Internal control consists of a number interrelated components, such as:

  •  The Control Environment.
  •  Risk Assessment.
  •  Control Activities.
  •  Information & Communications.
  •  Monitoring.                                    


     Trust is NOT an Internal Control feature.

Benefits of effective Internal Control

  1. It can help a business achieve its performance and profitability targets.
  2. It can help increase the accuracy and reliability of financial records and statements.
  3. It can help protect assets of the business from misuse, theft, accident, etc.
  4. It can help ensure a business complies with applicable laws and regulations.
  5. It can help a business avoid damage to its reputation and financial stability.

Is your Internal Control process sufficiently robust

  1. Is the process covered in the business Policies & Procedures?
  2. Is the process well documented?
  3. Is the “tone from the Top” in place to advocate strong internal controls?
  4. Is the process fully understood and periodically reviewed by all employees?
  5. Have activities such as Segregation of Duties, Authorization Controls, Requirement for Adequate Documentation, Physical Control been addressed?
  6. Is the process routinely (and independently) monitored and updated as the business changes?

Approach to improve your Internal Control environment

  1. Develop an understanding of what is currently in place.
  2. Develop an understanding of what would be appropriate (ensure fit for purpose so as not to over-complicate).
  3. Develop a Gap Analysis.
  4. Develop a Plan to close gaps.
  5. Ensure proper buy-in and training.
  6. Implement the Plan.

MDT Business Consulting