internal control
Organizational safeguard system
Internal control refers to the systems and procedures an organization uses to safeguard assets, ensure accurate records, and promote operational efficiency.
In business and accounting, internal controls include segregation of duties, approval processes, and audit trails: The fraud was possible because internal controls were weak.
Strong internal controls help prevent errors and detect misconduct before it causes serious damage.
Outside financial records examiner
- audit trailChronological record of transactions
- audit reportFormal accounting evaluation document
- complianceAdhering to requirements
- attestationFormal declaration confirming truth
due diligence · peer review · reconciliation · documentation · remediation · deficiency · walkthrough
Supervision or inadvertent omission
- board of directorsGoverning body of organization
- oversight committeePanel monitoring institutional conduct
- fiduciaryAgent bound by loyalty
- accountabilityObligation for one's actions
policies · procedures · authorization · delegation of authority · ethics · code of conduct · whistleblower · organizational structure
Evaluating likelihood of harm
- risk managementIdentifying and minimizing threats
- risk mitigationReducing exposure to threats
- inherent riskDanger native to activity
- financial riskPossible monetary loss
risk appetite · risk tolerance · vulnerability · exposure · likelihood · impact · monitoring
Confirming genuine identity
- authorizationFormal permission granted
- passwordAuthentication string
- encryptionConverting data into code
- user permissionsAllowed actions for accounts
data integrity · confidentiality · need-to-know · privileged access · identity management
Documenting business performance formally
- GAAPFinancial reporting conventions
- Sarbanes-OxleyCorporate governance reform law
- financial statementsFormal records of transactions
- bookkeepingRecording financial transactions systematically
ledger · journal entry · cutoff · valuation · completeness · existence · accuracy
external auditor
Outside financial records examiner
- audit trailChronological record of transactions
- audit reportFormal accounting evaluation document
- complianceAdhering to requirements
attestation · due diligence · peer review · reconciliation · documentation · remediation · deficiency · walkthrough
oversight
Supervision or inadvertent omission
- board of directorsGoverning body of organization
- oversight committeePanel monitoring institutional conduct
- fiduciaryAgent bound by loyalty
accountability · policies · procedures · authorization · delegation of authority · ethics · code of conduct · whistleblower · organizational structure · charter
risk assessment
Evaluating likelihood of harm
- risk managementIdentifying and minimizing threats
- risk mitigationReducing exposure to threats
- inherent riskDanger native to activity
financial risk · risk appetite · risk tolerance · vulnerability · exposure · likelihood · impact · monitoring
authentication
Confirming genuine identity
- authorizationFormal permission granted
- passwordAuthentication string
- encryptionConverting data into code
user permissions · data integrity · confidentiality · need-to-know · privileged access · identity management
financial reporting
Documenting business performance formally
- GAAPFinancial reporting conventions
- Sarbanes-OxleyCorporate governance reform law
- financial statementsFormal records of transactions
bookkeeping · ledger · journal entry · cutoff · valuation · completeness · existence · accuracy
- business accountingaccounts payable, accountant, accounts receivable, accounts, accrual
- oversightoversight committees, oversight board, review, auditors, supervisor
- auditingauditor, audit trail, audit trails, auditors, audit report
- audit findingsdeficiency, exception, discrepancy, issue, weakness
internal controlexternal audit
Outside accountant's formal examination
government regulation · regulatory oversight · legal requirement · public accountability · legislative oversight
internal controlnegligence
Failure to exercise care
mismanagement · free-for-all · anarchy · disorder · lawlessness
internal controlcoercion
Pressured compliance through threats
environmental control · compulsion · social control · peer pressure · dependence
internal, control, intern, internalize, internalized, internalizing, internalization, internally, interior