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proper 
records and processes
that generate a flow of 
timely, relevant and reliable information 
from 
within the organisation and from external sources
(c) Help 
ensure 
compliance with applicable laws
and regulations
,
 
and also with internal policies 
with respect to the conduct of business'
 
A sound system of internal control reduces but does not eliminate the possibilities of 
poorly judged 
decisions
, 
human error, deliberate circumvention of controls
, 
management override of controls 
and 
unforeseeable circumstances
.
 
Systems will provide reasonable (not absolute) assurance that the 
company will not be hindered in achieving its business objectives and in the orderly and legitimate 
conduct of its business, but won't provide certain protection against all possible problems. 
1.3 Need for control framework 
Internal control frameworks include the 
control environment
within which 
internal controls
operate. 
Other important elements are the 
risk assessment and response processes
, the 
sharing of information 
and 
monitoring
the environment and operation of the control system.
Organisations need to consider the overall framework of controls since controls are unlikely to be very 
effective if they are developed sporadically around the organisation, and their effectiveness will be very 
difficult to measure by internal audit and ultimately by senior management.
 
1.4 Control environment and control procedures 
The 
internal control system 
comprises the 
control environment 
and 
control procedures
. It includes 
all the policies and procedures (internal controls) adopted by the directors and management of an entity 
to assist in achieving their objective of ensuring, as far as practicable, the orderly and efficient conduct 
of its business, including adherence to internal policies, the safeguarding of assets, the prevention and 
detection of fraud and error, the accuracy and completeness of the accounting records, and the timely 
preparation of reliable financial information. Internal controls may be incorporated within computerised 
accounting systems. However, the internal control system extends beyond those matters which relate 
directly to the accounting system. 
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