ERM Glossary: Internal control
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In accounting and auditing parlance, an internal control is
a process put into effect by an organisation's structure, work and authority
flows, people and/or management information systems that is designed to help
the organisation accomplish specific goals or objectives. A firm’s ‘internal
controls’ are thus the combination of all of these controls.
A firm’s internal controls provide a means by which its
resources are directed, monitored, and measured. They play an important role in
preventing and detecting fraud. They also play an important role in protecting
the organisation's resources, both tangible (e.g. machinery and real estate)
and intangible (e.g. reputation or intellectual property such as trademarks).
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