Introduction
The main purpose of this chapter is to define internal control and internal control systems, with its links to the Combined Code and the role of the board in internal control. A classification of control into financial, non-financial quantitative and non-financial qualitative is provided. The chapter also describes the changing role of the management accountant.基于数字图像的直线检测技术研究
A number of qualitative and accounting controls are identified and the chapter concludes with a discussion of the limitations and cost-benefit of internal control.
Internal control
Internal control is the whole system of internal controls, financial and otherwise, established in order to provide reasonable assurance of:
(一)Effective and efficient operation;
(二)Internal financial control;
(三)Compliance with laws and regulations
This definition reflects the important business reasons for having a system of internal control: to maximize the reliability and timeliness of information for making decisions. It also reflects the need to comply with regulation (see below) whilst there are hundreds of different controls working in any organization; they can be categorized into four main types:
1. Detective: These controls identify undesirable outcomes that have occurred and function after the event has happened. This means that they are suited when it is possible to accept the loss or damage incurred. An example of this type of control is a financial reconciliation (where unauthorized transactions are detected after they have occurred).本文来自优.文,论-文'网原文请找腾讯32.49114
2. Directive: These controls ‘direct’ an activity towards a desired outcome. An example of this type of control would be training staff to work towards achieving particular objectives for the organization, or the existence of a strategy that informs employees, to carry a particular series of acts.
3. Preventative: These controls limit or stop the possibility of an undesirable event happening. Examples include physical access controls, separation of duty controls or authorization limits and levels.
4 .Corrective: These correct undesirable outcomes after they have happened. An example of this might be the terms and conditions of a contract to recover an overpayment from an employee.
Internal control system
An internal control system includes all the policies and procedures (internal controls) adopted by the directors and management of an entity to assist in achieving their objectives of ensuring, as far as practicable, the orderly and efficient conduct of a business, including adherence to internal policies, the safeguarding of assets, the prevention and detection of fraud and error, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information (CIMA Official Terminology). An internal control system comprises the control environment and control procedures.
Control environment is: The overall attitude, awareness and actions of directors and management regarding internal controls and their encompasses the management style, and corporate culture and values shared by all employees. It provides a background against which the various other controls are operated (CIMA Official Terminology).
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