All 18 Internal Controls Evaluation questions
More in Internal Controls Evaluation
What are the five components of internal control (COSO framework)? What is segregation of duties? What is the control environment and why is it foundational? What is a walkthrough test? What is the difference between preventive and detective controls? How does the auditor obtain an understanding of internal control? What is the difference between design effectiveness and operating effectiveness? What are entity-level controls versus process-level (transaction) controls? What is the difference between manual and automated controls? When does the auditor decide to test controls versus take a fully substantive approach?
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Auditing & Assurance › Internal Controls Evaluation

What is internal control?

Beginner

Answer

Internal control is the process, designed and operated by those charged with governance, management, and staff, to provide reasonable assurance about the achievement of objectives in financial reporting reliability, operational effectiveness/efficiency, and compliance with laws. For auditors, the focus is controls relevant to reliable financial reporting.
Real-world example Approval limits, reconciliations, and segregation of duties together form the internal control over financial reporting.

Common follow-ups: What objectives do internal controls serve? | Which controls do auditors focus on?

Audit Risk & Materiality Audit Evidence & Procedures Internal Controls Evaluation
All 18 Internal Controls Evaluation questions