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Internal Control System - Essay Example
This paper aims to gain sufficient understanding on internal control objectives in relation to the purchase, payable and payment system of a company. It will also attempt to analyze and evaluate the adequacy of and the compliance with internal control procedures being implemented…
Internal Auditing is defined as an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization to accomplish its objectives by evolving a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. The internal audit activity evaluates the adequacy and effectiveness of controls that encompass the organization's governance, operations, and information systems (Arens, Loebbecke, Lemon, & Splettstoesser, 2006). Internal audit reviews include the reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets, and compliance with laws, regulations, and contracts. These reviews ascertain the extent to which operating and program goals and objectives have been established and whether they conform to the requirements of the organization. It also examines the extent to which results are consistent with established goals and objectives and whether operations and programs are implemented or performed as intended.
One of the primary responsibilities of internal auditing is the assessment of internal control system of a company. ...