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Internal Controls

Any action taken by management, the board, and other parties to manage risk and increase the likelihood that established objectives and goals will be achieved. Management plans, organizes, and directs the performance of sufficient actions to provide reasonable assurance that objectives and goals will be achieved. 

Control Processes

The policies, procedures (both manual and automated), and activities that are part of a control framework, designed and operated to ensure that risks are contained within the level that an organization is willing to accept. 

Control Environment

The attitude and actions of the board and management regarding the importance of control within the organization. The control environment provides the discipline and structure for the achievement of the primary objectives of the system of internal control.

The control environment includes the following elements:

  • Integrity and ethical values.
  • Management’s philosophy and operating style.
  • Organizational structure.
  • Assignment of authority and responsibility.
  • Human resource policies and practices.
  • Competence of personnel.


The possibility of an event occurring that will have an impact on the achievement of objectives. Risk is measured in terms of impact and likelihood. 

Risk Management

A process to identify, assess, manage, and control potential events or situations to provide reasonable assurance regarding the achievement of the organization’s objectives. 


Source: The International Standards for the Professional Practice of Internal Auditing (Standards), Issued October 2008, Revised October 2012 and December 2016. © 2017 The Institute of Internal Auditors, Inc.