Auditing Internal Control 

What is internal control?

internal control is kind of system that used for supporting the decision making and the agenda in the organization.here, control have different types, we can see in the organization for example a rules, guidelines, also an action to support the activity in there. this internal control will help the management to achieve the efficient and effective. so the management should consider and compare the relation between cost and benefit.

Here, auditor have a role in detecting and preventing fraud and protecting the organization's resources, both physical and intangible assets. Then all employees produce information used in the internal control system or take other actions needed to affect control. Also, all personnel should be responsible for communicating upward problems in operations, non-compliance with the code of conduct, or other policy violations or illegal actions

Nowadays, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) developed a model for evaluating internal controls. This model has been adopted as the generally accepted framework for internal control and is widely recognized as the definitive standard against which organizations measure the effectiveness of their systems of internal control. COSO defines internal control as having five components:

1.    Control Environmentà sets the tone for the organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control.

2.    Risk Assessmentà the identification and analysis of relevant risks to the achievement of objectives, forming a basis for how the risks should be managed

3.    Information and Communicationà systems or processes that support the identification, capture, and exchange of information in a form and time frame that enable people to carry out their responsibilities

4.    Control Activitiesà the policies and procedures that help ensure management directives are carried out.

5.    Monitoringà processes used to assess the quality of internal control performance over time.

 Here, the function of internal control is:

1.     For the effectiveness and efficient of organization’s operation

2.     To recorded the accurate transaction

3.     To show if the financial repoting is reliable

4.     To know if the risk management systems are effective

5.     To complies with laws and regulations, internal policies, also internal procedures