Internal controls are activities or procedures designed to provide reasonable assurance that operations are working according to plan. Without adequate internal controls, management has little assurance that its goals and objectives will be achieved. Properly designed and functioning controls reduce the likelihood that significant errors or fraud will occur and remain undetected.
Why You Need to Streamline Your Internal Control Services
While auditors in Singapore delve into internal controls as part of the regular audit process, the purpose is to substantively test procedures used for checking transactions for errors and comparing account balances to find discrepancies in the audit. Any internal control weakness that is detected by the auditors is usually communicated in writing to the firm’s management or the audit committee.
Therefore, Internal Control is part of the first line of defense because it is the responsibility of Operational Management, which itself is accountable to Senior Management. In an expanding risk landscape in the business world, internal controls has emerged as a critical lever for change. Now, more than ever, it needs to rise to the challenge and demonstrate its value.
Why you need Internal Controls
What’s the Difference between Internal Controls and Internal Audit?
While internal audit is a function performed at specific times, internal control is an ongoing system. Internal Control is made up of procedures, policies and measures designed to make sure that an organization meets its objectives, and that risks that can prevent an organization from meeting its objectives are mitigated. Internal Control is responsible for day-to-day checks to ensure operational efficiency and effectiveness are achieved through the control of risks.
While the Internal Audit function is performed by internal auditors, Internal Control is the responsibility of operational management functions. Some risk experts even say that Internal Control is a part of a company’s day-to-day management and administration.
3 main types of internal controls
We provide three main types of internal controls: detective, preventative and corrective.
1. Detective controls
Detective internal controls help you find errors after they have occurred. They serve as a checks-and-balances system that determine the efficiency of your policies. Examples include surprise cash counts, taking inventory, review and approval of accounting work, internal audits, peer reviews, and enforcement of job descriptions and expectations.
2. Preventive controls
Preventative internal controls help you prevent the occurrences of errors and irregularities. While detective controls usually occur irregularly, preventative controls occur regularly, such as locking the building before leaving to entering a password before completing a transaction. Other preventative controls include backing up computer data, employee screening and training programs, segregation of duties, obtaining approval before processing a transaction and having physical control over assets.
3. Corrective controls
Corrective internal controls help you rectify any errors identified by the detective internal controls. As soon as an error is made, employees should follow the laid-down procedures to correct them, such as reporting the problem immediately to the line manager. Other examples of corrective internal controls include training programs and progressive discipline for errors.
We Provide Effective and Affordable Internal Control Services
The main reason for the lack of internal controls provisions in Singapore is cost issues. Many business owners find it very costly to apply strong internal measures, and at the same time, time-constrained auditors find it difficult to conduct checks. Our primary concern is to provide our clients with cost-benefit tradeoffs. We collaborate with local financial regulators and accounting bodies to know whether integrated reporting is a worthwhile endeavor for your business entity.
Our professionals are accustomed to identifying and evaluating risks, and are trained to think like business managers while focusing on business objectives allied to internal controls, rather than just the audit universe.
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You will get a month’s worth of bookkeeping. Whether or not you continue with us, your reports for the month are yours to keep.