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InsightsInternal Audit and Internal Control

Good Understanding of Internal Control

Internal control is not an internal audit activity or ex-ante financial control.

Internal control starts with a robust internal control environment, not with written procedures.

Internal control is not a job that should be done by institutions’ internal auditors or units that carry out financial services. The owner of the internal control system is management. Units carrying out financial services and internal auditors support the management in this area.

Internal control is not only a financial issue; it covers all institution functions and concerns all its units.

Internal control is not a system that increases or stalls bureaucracy. Internal control should be considered as additional work to the processes. It should be designed and implemented as part of the processes.

An internal control system is also needed in small units and activities. Different controls should be considered for small units and activities whose costs do not exceed their benefits.

Internal control does not provide absolute assurance. Suppose internal control is strong enough. A reasonable degree of assurance can be provided that resources are used effectively. In that case, there will be no corruption, and the financial statements will be accurate.

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