Internal Control is a process designed affected by an entity’s board directors, management,

and personnel to provide reasonable assurance about the entity’s objectives.

● Reliability of financial reporting

● Compliance with applicable laws and regulations
● Effectiveness and efficiency of operations

Internal Control System all the policies and procedures adopted by the management of an
entity to assist in achieving management's objective of ensuring as far as practicable the orderly
and efficient conduct of its business.
● Adherence of management policies
● Prevention and detection of fraud and error
● Accuracy and completeness of accounting records
● Timely preparation of reliable financial operation
● Safeguarding of assets

5 COMPONENTS OF INTERNAL CONTROL

1. Control Environment includes attitude, awareness and actions of directors and

management regarding the internal control system and its importance.

2. Risk assessment process identification, analysis, and management of risks pertaining

to the preparation of financial statements.

3. Information system consists of infrastructure, software, people, procedures, and data.

4. Control Activities are policies and procedures that help ensure management directives
to be carried out.
● Performance review
● Information processing controls
● Physical controls

5. Monitoring process that an entity uses to assess the quality of internal control overtime.

Internal Accounting Control Questionnaire- contains a series of questions designed to detect

control weaknesses.

Flowcharts symbolic diagram, it uses standardized symbols, interconnecting lines, and

annotations to represent information, documents, and document flow.