Internal controls are the accounting policies and auditing procedures that ensure that the accounting information of a company is accurate and reliable. Internal controls are essential for companies of all sizes and in all industries to prevent errors, fraud, and to promote operational efficiency and growth. These controls enable a company to provide timely and accurate financial information while complying with laws and regulations. The forms of internal controls in a company determine how complaint it will be to credible accounting and audit reporting.
Without internal controls, inaccuracy will occur in the preparation of a company’s financial statements. Investors also look out for internal controls in companies before they choose to invest. Under the Sarbanes-Oxley Act of 2002, internal controls are part of corporate governance measures that companies must put in place to safeguard investors from fraudulent activities.
Auditors look out for the available internal control measures in a company and to what extent the financial statements have complied with the accepted rules. In an audit process, auditors examine the effectiveness of the internal controls of a company and give opinions based on the examination. If proactively applied by an organization, internal controls can significantly assist an organization in achieving its objectives.
Internal controls are not the same for all companies, and there is no rigid internal controls system that all companies are required to establish. They change as the processes and technology that support an organization change, and the risks faced by an organization change over time as well. It is therefore key for an organization to find the appropriate balance of internal controls.
What should you expect from this service:
To provide low-cost, outsourced finance and accounting services to our SME clients within a framework that assures control, quality service delivery, and high performance.