There are many forces that can disrupt the progress of a company towards its objectives. Competition, economic environment and regulatory changes are some of the external factors that most companies can only watch, prepare and respond to. There are however internal risks that can be even more disruptive but these are more controllable if sufficient controls are in place.

Internal control provides reasonable assurance for management to keep a company on course towards its goals. Broadly speaking internal control should be implemented to provide reasonable assurance in three areas:

  1. An effective and efficient operating platform for attaining prescribed business goals such as growth, profitability, liquidity
  2. A set of reliable financial reports
    for stakeholders, and
  3. Compliance of legal and regulatory requirements in jurisdictions where operations are situated.

Different internal control design considerations apply to different companies, depending on size, resource constraints and complexity of operations. The main objective of a design is an effective internal control process that helps a company achieve its business objectives and avoid damage to its reputation and other unpleasant surprises. The approach of our Internal Control and Risk Advisory Services (ICRA Services) is to work with clients, particularly senior management and financial officers, whose control responsibilities cut across and permeate the entire organisation and all its operating sectors, to establish desirable qualities in five related project components. These are:

  1. Positive control environment
  2. Identification and assessment of relevant risks
  3. Establishment of appropriate control activities to address risks identified
  4. Effective communication of operation, financial and compliance related information to enable conduction and control of business
  5. Ongoing monitoring of the quality of the internal control process.
8 February 2013
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