MGT120H5 Chapter 4: Objectives and Components of Internal Control
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MGT120H5 Full Course Notes
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Document Summary
Explain the objectives and components of internal control. The primary way that fraud and unintentional errors are prevented, detected, or corrected in an organization is through a proper system of internal control. Internal controls are so important that the ontario legislature passed a law to require public companies- those that sell their shares to the public- to maintain a system of internal controls. The reliability of the company"s financial records and. The system of internal control should be designed to ensure that the accounting records are accurate, reliable, and timely. W/o reliable records, the business cannot know if its is profitable and investors and creditors cannot know if the financial statements are faithful representation of the company"s operations. The company"s ability to oeprate effectively and efficiently. The system of internal designed to ensure that assets and records are safe-guarded. No company can afford to waste physical or reputational resources.
