Fundamentals of Risk Management

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Risk assurance
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help ensure that the company is not unnecessarily exposed to financial risks and that 
financial information used within the business and for public reporting is reliable.
Purpose of internal control
The primary purpose of internal control activities is to help the organization achieve 
its objectives. Typically, internal controls have the following purposes:
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safeguard and protect the assets of the organization;
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ensure the keeping of accurate records;
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promote operational effectiveness and efficiency;
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adhere to policies and procedures, including control procedures;
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enhance reliability of internal and external reporting;
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ensure compliance with laws and regulations;
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safeguard the interests of shareholders/stakeholders.
The internal control system includes internal control activities and the structure
and responsibilities that relate to them. The purpose of this internal control system 
is to enable directors to drive the organization forward with confidence, in both 
TAbLE 
33.1
Definitions of internal control
Organization
Definition of internal control
CoCo
(Criteria of Control)
Internal control is all the elements of an 
organization that, taken together, support people
in the achievement of the organization’s objectives. 
The elements include resources, systems, processes, 
culture, structure and tasks.
COSO
A process, effected by an entity’s board of directors, 
management and other personnel, designed to 
provide reasonable assurance regarding the 
achievement of objectives in the following categories:
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effectiveness and efficiency of operations;
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reliability of financial reporting;
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compliance with applicable laws and regulations.
IIA
(Institute of Internal Auditors)
A set of processes, functions, activities, sub-
systems, and people who are grouped together or 
consciously segregated to ensure the effective 
achievement of objectives and goals.

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