INTERNAL CONTROL SYSTEM: STRUCTURE, SELF-DEVELOPMENT AND SELF-CONTROL
DOI:
https://doi.org/10.32070/ec.v8i39.33Keywords:
internal control, internal audit, risk, compliance, risk managementAbstract
Without a coordinated, limited control risk resources cannot be effectively used, and significant risks cannot be identified and properly managed.
Internal control is clearly structured and has a vertical hierarchy. The system of internal control consists of three levels and each of them inherent function of improvement of the previous one. The lowest level of control is the control of managers departments as well as primary control during operations with production department.
The second level of internal control is the specialized control departments, such as: financial control, security, compliance, risk management, quality management of service or manufactured products, and so on. The functions of these divisions are the development of activities methods in their working area and control implementation of this methods, or compliance with external / legal regulations. Within the limits of their authority, the subjects of control at this level of internal control also develop / propose changes to the control methods (within their competences) which are applied to the first level.
The third level is the level of internal audit. The function of internal audit is directed at two main lines: control of operations and settlements; assessment and improvement of the internal control system. Therefore, internal audit, has one of the main tasks, it is the improvement and control of the subjects of the first and second levels of the internal control system. Improvement and development of internal audit is carried out through self-assessment and external evaluation of internal audit (commissioned by the Supervisory Board).
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