Internal Controls for Better Compliance

Internal Controls are Critical to Maintaining Organizational Compliance Programs

 

internal controls for compliance

Organizations are tasked with providing proper preventative and detective internal controls and control procedures for organizational operations to ensure all corporate compliance obligations are met and to maintain the integrity of financial information. Executives and compliance teams must institute and maintain effective corporate compliance programs, including promoting a heightened awareness of compliance issues including data security, financial regulations (internal and external), accounting practices, human resources, legal requirements and more.

Ultimately, strong internal controls provide:

  • Compliance with organizational policies
  • Compliance with laws and regulations
  • Protection against waste, fraud, and inefficiency
  • Reduced organizational risk
  • Reporting accuracy and consistency across business units and departments
  • Documented evidence of compliance or non-compliance for internal audit
  • Management controls

Any time there is an opportunity to make procedures more compliant using workflow systems, they should be considered. In many cases, simply applying a workflow system to an existing procedure drastically increases the likelihood of those procedures being compliant. We'll cover how this occurs in a later section. In addition, auditing capabilities ensure that all activities are documented and time stamped with who, what, when and why.

What is an Internal Control?

An internal control a process for consistently meeting organizational goals for operational effectiveness and efficiency, accurate reporting, and compliance with laws, regulations and policies. While often referred to in a financial setting, internal controls are used across all horizontals within an organization from finance to IT to marketing.

Internal Control Mechanisms

There are several internal control mechanisms that need to be in place for effective compliance:

  • Published Standards and Policies
  • Documented Procedures
  • Training
  • Monitoring
  • Internal audit

How Workflow Automation Enables Internal Controls

Companies often employ workflow automation to provide a framework for processes in need of internal controls. Workflow automation provides consistent control procedures, checkpoints, approvals, and structure that force process users to comply with established rules. As a process user moves through a process, internal controls govern the information provided, when a process can proceed (if requirements are met), when a part of a process requires review, etc. The process works the same for everyone, ensuring consistency.

 

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