Executive Summary
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Internal control systems must have the backing of senior management to be effective.
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Internal auditors should make management aware of the importance of sound internal controls, and the serious problems that could arise if they are inadequate.
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The benefits of sound internal controls include efficiency and effectiveness, protection against losses and unpleasant surprises, optimum use of assets, and motivated staff—all in all, they make a major contribution to organizational survival and prosperity.
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Key risks resulting from lack of good internal control are fraud, incorrect accounts, inefficiency and ineffectiveness, damage to the reputation of the organization and its management, and a consequent fall in the value of the company.
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Internal auditors should form their own view of the specific risks facing their organization.
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If the internal control system is inadequate, they should meet with senior management to explain the need for strong, sound controls and their benefits for the organization.
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