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Are your internal controls functioning properly? Help your organization achieve its goals by implementing a system to monitor your internal controls and measure their effectiveness.

Implementing an internal control system designed around your organization’s specific risks is a necessity for any organization. Internal controls must be properly designed and implemented to be useful in achieving your organization’s strategic, operating, compliance, and reporting objectives. Internal controls allow an organization’s management piece of mind knowing everything is operating properly without having to oversee every facet of the organization.

Monitoring internal controls is essential to ensure controls are operating efficiently. Monitoring involves the use of evaluations by management and third-parties of the controls in place to identify issues and communicate these issues to the appropriate parties for corrective action to be taken. Implementing a competent monitoring system can be incredibly cost-effective to your organization in resolving issues timely and efficiently.

Your organization’s monitoring system may consist of ongoing activities, separate evaluations, or a combination of the two; all of which are focused on your organization’s identified risks. Management should emphasize a general ethical environment through daily actions and behavior, and setting “the tone at the top” as it is more commonly referred to, can help to ensure that the assessment procedures in place are being followed with diligence. Setting a schedule for daily, weekly, and monthly monitoring techniques is imperative. Management must also hold its team accountable for understanding issues identified and a timeline for corrective improvements. Below are some internal control monitoring procedures that can be tailored to your organization:

  • Implement independent verifications, such as reconciliations, by personnel of different levels on a timely basis.
  • Perform walkthroughs of your transaction recording processes to verify all required steps are taken.
  • Schedule an internal audit.
  • Use bench marking to compare your report results to similar departments, companies, or industries.
  • Consult information technology specialists regularly to learn about security setting updates and current technology and cyber security risks.
  • Learn your software; many applications, such as Quick Books, have security settings that may be beneficial in safeguarding confidential information.

For more information on implementing and monitoring internal controls, please feel free to contact a member of our Accounting and Assurance team at 858-558-9200.

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