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SUMMARY
Audit
as defined in accounting and auditing,
is a process for assuring
achievement
of
an
organization's
objectives
in
operational effectiveness and efficiency, reliable financial
reporting,
and compliance
with laws, regulations and policies. A broad concept,
internal control involves
everything that controls risks to an organization.
It is a means by which an organization's resources are directed,
monitored, and
measured. It plays an important role in detecting and preventing fraud and protecting
the organization's resources, both physical (e.g., machinery and property) and
intangible (e.g., reputation or intellectual property such as trademarks).
At the organizational level, internal control objectives relate to the reliability of
financial reporting, timely feedback on the achievement of operational or strategic
goals, and compliance with laws and regulations. At
the specific transaction level,
internal control refers to the actions taken to achieve a specific objectiveInternal
control procedures reduce
process variation, leading to more predictable outcomes
.
