Types of Controls
An internal control is a process used to safeguard the assets of an organization. Assets can include systems, data, people, hardware, or the reputation of the organization. Internal controls help in achieving the objectives of the organization by mitigating various risks.
Internal controls are implemented through policies, procedures, practices, and organizational structures to address risks. Internal controls provide reasonable assurance to management about the achievement of business objectives. Through internal controls, risk events are prevented or detected and corrected.
Top management is responsible for implementing a culture that supports efficient and effective internal control processes.
Effective controls in an organization can be categorized into preventive, detective, deterrent, and corrective as shown in the following figure:
Figure 1.5: Types of effective controls in an organization
You will now explore these control...
