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INTERNAL CONTROL

A process, effected by the entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting and compliance

components of internal control

The control environment

Risk Assessment

Control Activities

The Accounting Information System

Monitoring of Controls

It is defined by the standards, processes, and structures that guide individuals in carrying out their duties.

Risk assessment is management’s process for identifying, analyzing, and responding to risks.

Control activities are policies and procedures that help mitigate the risk that the organization’s objectives are not met.

In performing effective risk assessment, organizations should:

1-Clearly specify objectives 2-Identify and analyze risks to the achievement of its objectives 3- Consider potential fraud relating to the achievement of objectives. 4- Identify and assess changes that could impact internal control.

The basic principles are that management should:

• Select and develop control activities that mitigate risks of the achievement of organization objectives to acceptable levels. • Select and develop general control activities over technology to support organization objectives. • Deploy control activities through policies that establish what is expected and in procedures that put policies into action.

2. Describe on a timely basis the transactions in sufficient detail to permit proper classification of transactions for financial reporting.3. Measure the value of transactions in a manner that permits recording their proper monetary value in the financial statements.4. Determine the time period in which transactions occurred to permit recording of transactions in the proper accounting period.5. Present properly the transactions and related disclosures in the financial statements.

Is a process to assess the quality of internal control performance over time.

• Select, develop, and perform ongoing and separate monitoring evaluations to determine that the components of internal control are present and functioning. • Evaluate and communicate internal control deficiencies in a timely manner to those responsible for taking corrective action, including senior management and the board of directors and its audit committee as appropriate.