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Control built within a process is internal in nature. It takes place with a combination of interrelated components – such as social environment effecting behavior of employees, information necessary in control, and policies and procedures. Internal control structure is a plan determining how internal control consists of these elements. [3]
It is incorrect to say that the manager by completing the management process may warn the organization. The manager can control internal factors (e.g. human power, infrastructure, infrastructure, etc.) but cannot control external factors (e.g. political, social change, competition, etc.), 3.
Management control as an interdisciplinary subject. A management control system (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole in light of the organizational strategies pursued.
Common criteria are labeled as, Control environment (CC1.x), Information and communication (CC2.x), Risk assessment (CC3.x), Monitoring of controls (CC4.x) and Control activities related to the design and implementation of controls (CC5.x). Common criteria are suitable and complete for evaluation security criteria.
Governance activities ensure that critical management information reaching the executive team is sufficiently complete, accurate and timely to enable appropriate management decision making, and provide the control mechanisms to ensure that strategies, directions and instructions from management are carried out systematically and effectively. [12]
An internal audit checklist [14] can be a helpful tool to identify common risks and desired controls in the specific process or specific industry being audited. Developing and executing a risk-based sampling and testing approach to determine whether the most important management controls are operating as intended.
This first control self-assessment identified several areas for improvement in internal control across the Commission most notably the need to implement a more systematic approach to risk management. The outcome of this first self-assessment was the implementation of the requirement for every Directorate General to perform a control and risk ...
Periodic review of process and controls using relevant management reporting tools. For example, these would include monthly review of aging of accounts receivable to determine the extent of reserves required for doubtful debts. Independent Assessment Mechanism Use of external specialists or professionals to review and assess internal controls.