Popular misconception is that the internal control system is implemented simply to stop fraud and error. As the points below show, this is not the case.
A lack of internal control implies that directors have not met their obligations under corporate governance. It specifically means that the risk management strategy of the company will be defective.
– The orderly and efficient conduct of its business, including adherence to internal policies
– The safeguarding of assets of the business
– The prevention and detection of fraud and error
– The accuracy and completeness of the accounting records, and
– The timely preparation of financial information.