This guide provides an overview of the internal controls process including objectives, implementation, timeline, owner responsibilities and evaluating the effectiveness of internal controls design.
The objectives of internal controls include creating operating effectiveness, improving the quality of financial reporting, and enhancing the transparency of financial reporting. Internal controls need to be part of day-to-day activities and objectives. The controls documented in a process must be the controls actually performed. The controls in the process must be designed and operated effectively. Management must be able to prove that it performed the controls, so retention of documentation is critical. Internal controls are established to further strengthen the reliability and integrity of information; ensure compliance with policies, plans, procedures, laws and regulations; aid with the safeguarding of assets and the economical and efficient use of resources; and accomplish established objectives and goals for operations or programs.