Internal control
An entity’s system of internal control comprises processes and controls designed to provide reasonable assurance about objectives relating to operations, reporting and compliance. The auditor obtains an understanding relevant to the audit and assesses controls and associated risks.
Worked example
A business requires an independent review of changes to supplier bank details before payments are released.
Common mistake
Internal control cannot guarantee that fraud or error never occurs: management override and human error remain possible.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Direct | September 2026–June 2027 |
| ACCA | BT | Direct | September 2026–June 2027 |
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBL | Direct | September 2026–June 2027 |
| ACCA | SBR | Supporting | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |