(c) Implementation of an internal control structure

74. Management often establishes an internal audit unit as part of its internal control structure.

(d) Periodic monitoring of the effectiveness of an internal control structure.

The Guidelines specify the nature of the internal control structure and the objectives of internal controls.

(b) A minimal set of internal control standards that any State could use as a framework to develop a specific internal control structure

Government management can use these standards to implement an effective internal control structure.

45. Documentation of the internal control structure should include identification of an organization s structure and policies, its operating categories, related objectives and its control procedures.

64. A specific authority should be assigned the responsibility for developing and promulgating a government wide definition of an internal control structure, the objectives to be achieved by that structure and the standards to be followed when designing an internal control structure.

Corrective action may require legislatures to change existing laws, central organizations to revise internal control standards and procedures and management to revise its internal control structure.

Therefore, responsibility for the adequacy and effectiveness of the internal control structure rests with management.

3. As they are ultimately responsible for the adequacy of the internal control structure and its implementation, it is important that the management structures of all organizational units within government understand the nature of the internal control structure and the objectives of internal controls.

While internal auditors can be a valuable resource to educate and advise on internal controls, the internal auditor should not be a substitute for a strong internal control structure.

42. The following controls are those widely used in designing an orderly and effective internal control structure.

All managers should realize that a strong internal control structure is fundamental to their control of the organization, its purpose, operations and resources.

15. Organizational changes and management attitude can have a profound impact on the effectiveness of an internal control structure and the personnel operating the structure.

In such an environment, an effective internal control structure can provide reasonable assurance that management s objectives are being achieved.

73. To design, establish and maintain an effective internal control structure, managers should understand the objectives to be achieved.

16. To improve overall management control of the Procurement and Transportation Division, the Board recommends that the internal control requirements in the modified structure of the Procurement and Transportation Division should be analysed and appropriate internal control systems established.

Internal control

Any one control has advantages and disadvantages and an effective internal control structure uses a mixture of controls to compensate for the particular disadvantages of individual controls.

The specifics of an internal control structure must be periodically reviewed and adjusted to keep pace with each organization s changing environment.

They can be viewed as the minimum acceptable standards for organizations to follow when instituting internal controls and should provide criteria for auditors when auditing the internal control structure.

4. The following standards form the framework for an internal control structure and have been categorized under general standards and detailed standards

44. An organization must have written evidence of, (a) its internal control structure, including its objectives and control procedures, and (b) all pertinent aspects of significant events and transactions.

(a) Transparent and comprehensive documentation concerning the internal control structure and all transactions and significant events, which should be readily available for examination

The present document attempts to capture those standards and to present a consensus of the standards desirable in any specific internal control structure.

The head of each governmental organization must ensure that a proper internal control structure is instituted, reviewed and updated to keep it effective.

Together, they define the framework for the minimum level of acceptability for an internal control structure in operation. They should be used as the criteria for both developing and evaluating internal controls.

Article XIII. Internal control

Internal Control Standards Committee

11. In practice, the distinction among these various categories is often difficult to recognize because an effective internal control structure requires elements of each.

66. Wherever the authority is assigned, the Supreme Audit Institution has a vital role to play in the development of the internal control structure.

Some of these internal control issues have temporarily been exacerbated by UNOPS change management decision to reorganize its structure to bring services closer to clients.

Internal control and risk management

Chairman, Internal Control Standards Committee

Documentation The internal control structure and all transactions and significant events are to be clearly documented and such documentation is to be readily available for examination.

Managers and employees who possess a good understanding of internal controls and are willing to take responsibility for them are vital to an effective control structure.

43. The internal control structure and all transactions and significant events are to be clearly documented and the documentation is to be readily available for examination.

B. Limitations on internal control effectiveness

To maintain an internal control structure that would eliminate the risk of loss is not realistic and would probably cost more than is warranted by the benefits derived.

14. Because any internal control structure depends on the human factor, it is subject to flaws in design, errors of judgement or interpretation, misunderstanding, carelessness, fatigue and distraction.

IV. Discussion of the internal control standards

VI. Implementing and monitoring internal control structures

(a) Enterprise risk management and internal control framework

V. Establishing the framework for internal control structures