Chapter 23 Internal Financial Control

Chapter 23 Internal Financial Control

Part 1 The Meaning of Internal Control and Internal Check

Part 2 The Purpose of Internal Control

To help management achieve the entity's objectives, especially in terms of ensuring:

-The orderly and efficient conduct of the business

-The safeguarding of assets

-The prevention and detection of fraud and error

-The accuracy and completeness of the accounting records

-The timely preparation of reliable financial information

Why do companies need internal controls?

Internal controls are there to prevent risks occurring or to minimise the impact of risks. Even when controls are in place documents may still get lost of portable assets may go missing. The level and extent of internal controls required depend on what the risks are if such controls fail. It is particularly important that stringent controls exist where there are associated legal requirements.