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PART C: ACCOUNTING AND REPORTING SYSTEMS, CONTROLS AND COMPLIANCE 
 
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Perhaps the simplest framework for internal control draws a distinction between

 Control 
environment 
– the overall context of control, in particular the attitude of directors and 
managers towards control
 

Control procedures
– the detailed controls in place 
The Turnbull report on Internal Control also highlights the importance of

Information
and 
communication processes

Processes
for 
monitoring
the 
continuing effectiveness
of the system of internal control
 
However, any internal control system can only provide the directors with 
reasonable assurance 
that their 
objectives are reached. This is because of 
inherent limitations
, such as 
human error 
or 
fraud
, collusion 
between employees and controls being overridden by managers. 
 
2
Internal control environment and procedures 
The 
control environment
is influenced by 
management's attitude
towards control, the 
organisational 
structure
and the 
values
and 
abilities
of employees.
2.1 Nature of control environment 
The
 control environment
is the overall attitude, awareness and actions of directors and management 
regarding internal controls and their importance in the entity. The control environment encompasses the 
management style, and corporate culture and values shared by all employees. It provides the 
background against which the various other controls are operated. 
The following are elements of a strong control environment. 
