CIMA P3 Syllabus C. Internal controls - Elements of Internal Control - Notes 2 / 10
The internal control process includes:
Control environment
This refers to the culture of the organisation: Is good internal control valued and encouraged?
Risk assessment
Objectives should be set that allow associated risks to be clearly identified and analysed as part of the process of risk management. This includes matters leading to fraud and any circumstances where change could impact on internal control systems.
Control activities
Risk can never be eliminated, but suitable control activities are deployed to manage risks and provide reasonable assurance over the achievement of objectives.
Information and communication
How does management receive information that might indicate that internal control is failing?
Monitoring activities
Is the internal control system being kept up to date with respect to business developments? Is it operating properly?