The internal control system consists of the control environment, risk assessment, control activities, information and communication, and monitoring. In a financial statement audit, the independent auditor obtains an understanding of internal control and communicates significant deficiencies to management and those charged with governance.
Related terms
COSOThe organisation that publishes the most widely accepted frameworks for internal control and enterprise risk management, and the general name for those frameworks.Segregation of dutiesA fundamental internal control principle requiring that initiating, approving and recording transactions and safeguarding assets be assigned to different people.Internal auditAn independent, objective assurance and consulting activity that evaluates the effectiveness of an organisation's risk management, control and governance processes.IT general controlsControls over access management, change management, IT operations and system development that ensure information systems operate reliably.Compliance auditAn examination of whether an organisation's activities are carried out in accordance with the relevant laws, regulations, contracts or internal rules.Compliance officerThe authorised person responsible for running the compliance programme for the prevention of money laundering and terrorist financing at an obliged entity.
Last updated: October 22, 2026 · This definition is for general information only.