Objectives and Components of Internal Control

[1] There are three categories of objectives, which allow organizations to focus on differing aspects of internal control:

  • Operations - Refers to the effectiveness and efficiency of the organizations operations, including operations and financial performance goals and safeguarding assets against loss.
  • Reporting - Relates to internal and external financial and non-financial reporting and may incorporate reliability, timeliness, transparency, and additional terms as set forth by regulators, recognized standard setters, or the entity’s policies.
  • Compliance - Relates to adherence to laws and procedures to which the entity is subject

1 Committee of Sponsoring Organizations of the Treadway Commission (COSO), Internal Control – Integrated Framework (Executive Summary, May 2013), pg. 3.

Internal Control consists of five interrelated components: