Internal Control Concepts. A Guide for Deans, Directors, and Department Chairs. What are internal controls and why are they important?.
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A Guide for Deans, Directors, and Department Chairs
Internal control is a process, effected by an organization’s people, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:
An organization’s leaders are ultimately responsible and must assume“ownership” of the internal control system for theirareas of responsibility.
Provides leadership and direction to senior administrators. Together with them, the president shapes the values, principles, and major operating policies that form the foundation of the institution’sinternal control system.
Provide direction to senior administrators responsible for major functional areas such as:
Have line responsibility for designing and implementing control systems at unit levels.
Are responsible to execute institution-wide control policies and procedures.
These responsibilities should come with authority and accountability to the next higher level.
You, as a manager, are responsible for ensuring that internal controls are established and functioning to achievethe mission and objectivesof your unit.
Identify what controls currently exist or that should be established to reasonably assure the achievement of each specific objective of your unit.
Internal Auditing provides an independent evaluation of the adequacy of internalcontrols and reports the results to theUniversity Administration.
Sometimes there is no out-of-pocketcost to establish an adequate control.A realignment of duty assignmentsmay be all that is necessary toaccomplish the objective.
Information for this presentation was obtained from “Internal Control Concepts”, NC State University, Internal Audit Division,