Lesson: Examples of Internal Controls

This lesson provides examples of various internal controls that entities use to reduce the risk of errors and fraud. These examples include segregation of duties, which involves dividing responsibilities for related activities among different individuals; access controls, which restrict access to sensitive areas, documents, and computer systems; asset physical controls, such as key card systems and checks; reconciliations, which involve comparing sets of records to ensure accuracy; information security to maintain the confidentiality of data; approval authority for company decisions; a code of ethics to promote a positive organizational culture; and auditing, both internal and external, to review and evaluate the effectiveness of internal controls. By understanding these common internal controls, individuals can better assess the overall risk and effectiveness of an organization's processes.