Internal Control and Internal Audit

Jack Diamond

Chapter 17 in The International Handbook of Public Financial Management, 2013, pp 374-395 from Palgrave Macmillan

Abstract: Abstract In public financial management (PFM), internal control systems refer to a range of management tools aimed at different broad objectives: first and foremost, to ensure an entity’s compliance with laws and regulations; second, to ensure the reliability of its financial data and reports; and third, to facilitate the efficiency and effectiveness of the entity’s operations. In this way, a sound internal control framework is designed to assure the public that government operations attain some basic fiduciary standards in several areas: guarding against the misuse and inefficient use of financial and human resources; safeguarding assets; achieving budgetary objectives, as set out in government policies and spending plans; countering fraud and error; and maintaining satisfactory accounting records to enable the organization to produce timely and reliable financial and management reports.1 As such, internal controls can be regarded as one of the foundations of good governance in a country and the first line of defense against improprieties. They also provide the public with “reasonable assurance”2 that if improprieties do occur, they will be made transparent and appropriately addressed.3

Keywords: Audit Committee; Internal Audit; External Auditor; External Audit; Internal Auditor (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-31530-4_18

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DOI: 10.1057/9781137315304_18

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