Definition of Internal Control
Internal Control is a process, affected by UMDNJ's Board of Trustees, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:
- Effectiveness and efficiency of operations including the use of UMDNJ's resources.
- Reliability of financial reporting, including reports on budget execution, financial statements, and other reports for internal and external use.
- Compliance with applicable laws and regulations.
A subset of these objectives is the safeguarding of assets. Internal control should be designed to provide reasonable assurance regarding prevention or prompt detection of unauthorized acquisition, use, or disposition of UMDNJ's assets.
Internal Control is a major part of managing an organization. It comprises the plans, methods, and procedures used to meet missions, goals, and objectives and, in doing so, supports performance-based management.
Internal Controls also serve as the first line of defense in safeguarding assets and preventing and detecting errors and fraud.
In short, Internal Control (which is synonymous with management control), helps managers achieve desired results through effective stewardship of resources.