a company's internal control system course hero

While Cadbury recognised the need for internal control systems for risk management, detailed advice on application of those controls was provided by the Committee of Sponsoring Organisations, (COSO) and the Turnbull Report. The report's initial definition of risk management was 'the process by which executive management, under board supervision, identifies the risk arising from business and establishes the priorities for control and particular objectives'. Furthermore there should be a culture of risk awareness. The Cadbury Report noted that risk management should be systematic and also embedded in company procedures. The UK Corporate Governance Code recommends that 'The board should maintain sound risk management and internal control systems'. The control procedures and policies provide the detailed controls implemented within the company.

Internal management control refers to the procedures and policies in place to ensure that company objectives are achieved.

An internal control system comprises the whole network of systems established in an organisation to provide reasonable assurance that organisational objectives will be achieved.

Controls attempt to ensure that risks, those factors which stop the achievement of company objectives, are minimised.

In terms of risk management, internal control systems span finance, operations, compliance and other areas, i.e. Good corporate governance means that the board must identify and manage all risks for a company.

Internal control and risk management are fundamental components of good corporate governance. 1.9.1 Elements of an effective internal control system (COSO).1.9 Reviewing the effectiveness of internal control.1.7 Roles in risk management and internal control.1.5 Limitations of internal control systems.

1.4 Objectives of internal control systems.

A company's internal control system course hero