Corporate Governance and Internal Control - Types and Principles of Accounting Controls

Question 1

Define Internal Control and their objectives.

Answer 1

1) Established and managed by top management
2) to obtain reasonable assurance i) effectiveness and efficiency of operations ii) Reliability of financial reporting iii) compliance of laws and regulations

Objectives
1) safeguard assets 2) effectiveness and efficiency of operations 3) Adherence to rules, guidelines systems established by management 4) accurate financial reporting i) recording only valid transaction ii) timely manner iii) financial values of transactions iv) in the relevant time period

Question 2

Categories of Controls

Answer 2

Preventive, Detective, Corrective, Feedback and Feed Forward Controls. General Controls and Application controls

Most Detective controls are also Feed back controls