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OVERVIEW
Internal control mechanisms are the set of tools, authorizations, procedures, and standards designed within a system that regulate processes to provide management, the board of directors, and others with reasonable assurance that the goals and objectives important to the organization will be met.


PURPOSE
Internal control mechanisms encompass the suite of policies, processes, culture, tasks, and other aspects of an organization that support the effective achievement of its objectives. They facilitate the efficiency of operations and compliance with applicable laws and regulations, contribute to effective risk management, and strengthen an organization’s capacity to respond appropriately to business opportunities and threats.

 

The board of directors is ultimately responsible for ensuring that such a system of control mechanisms is properly established and maintained. As part of this responsibility, the board should regularly review the system of internal controls at a high level, to determine that it works as expected and remains appropriate.

 

APPROACH
Internal control mechanisms aim to provide a suite of tools to systematically ensure that organizational effectiveness is achieved on an ongoing basis. This does not occur in a vacuum and requires the active involvement of both management and its governance structures.

A core control mechanism is monitoring, often done with the assistance of information technology and always based on reporting by team leaders, functional management teams such as risk management, security and finance, compliance teams, internal audit, external audit, board committees, and senior management, including the president and the chief executive officer. Examples of useful internal control reports to be monitored are varied and include the following:  

• reports for management on the operations and financial condition;
• performance reports on risk management and other control systems;
• reviews and reports on any significant non-compliance with controls, the organization’s code of conduct, or laws and regulations;
• internal and external auditors’ opinions on the adequacy of controls for the organization as a whole and for individual business activities, and follow-ups on their recommendations for improvements;
• views and observations of investors, regulators, industry analysts, and even stakeholders, activists, media, and social media sources about the organization.

 

 


Internal control mechanisms

OVERVIEW
Internal control mechanisms are the set of tools, authorizations, procedures, and standards designed within a system that regulate processes to provide management, the board of directors, and others with reasonable assurance that the goals and objectives important to the organization will be met.

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Welcome to CPA Canada!

The CICA and CMA Canada joined together January 1, 2013, to create CPA Canada as the national organization to support unification of the Canadian accounting profession under the CPA banner.

Our integrated CPA Canada website will launch in January 2014. Until that time, all our existing resources, services and information are available through the CICA and CMA Canada legacy sites.

Bienvenue à CPA Canada!

L’ICCA et CMA Canada se sont regroupés le 1er janvier 2013 afin de créer CPA Canada, l’organisation nationale qui soutient l'unification de la profession comptable canadienne sous la bannière CPA.

Le nouveau site CPA Canada sera mis en ligne en janvier 2014. Entre-temps, toutes nos ressources et tous nos services sont accessibles sur les sites de l’ICCA et de CMA Canada.