Internal Controls and Risk Mitigation
Using Controls to Reduce Risk
Internal controls are policies and procedures designed to reduce risks, safeguard assets, ensure reliable reporting, and support compliance with laws and regulations.
- Segregation of duties.
- Authorization and approval procedures.
- Physical security controls.
- Access controls for information systems.
- Reconciliations and supervisory reviews.
- Automated monitoring systems.
Note
Strong internal controls reduce the likelihood of fraud, errors, and operational failures.
Summary
Risk mitigation depends on designing and maintaining effective preventive and detective controls.