Preventive Controls Separation of duties. Pre-approval of actions and transactions (such as a Travel Authorization) Access controls (such as passwords and Gatorlink authentication) Physical control over assets (i.e. locks on doors or a safe for cash/checks)

There are five interrelated components of an internal control framework: control environment, risk assessment, control activities, information and communication, and monitoring.

Examples of Internal Controls

• Segregation of Duties. When work duties are divided or segregated among different people to reduce the risk of error or inappropriate actions.
• Physical Controls.
• Reconciliations.
• Policies and Procedures.
• Transaction and Activity Reviews.
• Information Processing Controls.

Training programs, drug testing, firewalls, computer and server backups are all types of preventative internal controls that avoid asset loss and undesirable events from occurring.

A test of control describes any auditing procedure used to evaluate a company’s internal controls. The aim of tests of control in auditing is to determine whether these internal controls are sufficient to detect or prevent risks of material misstatements. This, in turn, reduces the client’s risk.

Yes, generally speaking there are two types: preventive and detective controls. Both types of controls are essential to an effective internal control system.

The seven internal control procedures are separation of duties, access controls, physical audits, standardized documentation, trial balances, periodic reconciliations, and approval authority.

Yes, generally speaking there are two types: preventive and detective controls. Both types of controls are essential to an effective internal control system. From a quality standpoint, preventive controls are essential because they are proactive and emphasize quality.

Internal control, as defined by accounting and auditing, is a process for assuring of an organization’s objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies.

Internal control is a process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance: That information is reliable, accurate and timely. Of compliance with applicable laws, regulations, contracts, policies and procedures.

There are three main categories of internal controls: preventative, detective and corrective.

Three basic types of control systems are available to executives: (1) output control, (2) behavioural control, and (3) clan control. Different organizations emphasize different types of control, but most organizations use a mix of all three types.