The objectives of an Internal Control System (ICS) are to provide reasonable assurance that the organisation achieves its key objectives in four broad areas:
1. Reliability of financial reporting
- Transactions are properly authorised, recorded accurately, complete, and timely.
- Financial statements are prepared in accordance with applicable standards and are free from material misstatement.
2. Effectiveness and efficiency of operations
- Resources are used economically; waste is reduced.
- Processes run consistently and support performance targets.
3. Compliance with laws, regulations, and internal policies
- The organisation follows statutory requirements (tax, labour, reporting, industry rules) and internal SOPs.
4. Safeguarding of assets
- Assets (cash, inventory, PPE, data) are protected from loss, theft, misuse, or unauthorised access.
5. Prevention & detection of fraud & error
- Prevention: controls such as segregation of duties, authorisation limits, access controls, and strong ethical culture reduce opportunities.
- Detection: controls such as reconciliations, reviews, exception reports, stock counts, and internal audit identify problems early.
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