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Internal Control

Internal controls are the policies, procedures, and mechanisms an organisation puts in place to ensure reliable financial reporting, compliance with applicable laws and regulations, and effective and efficient operations. Controls may be preventive — designed to prevent errors or irregularities from occurring — or detective, designed to identify issues after they have occurred. In the context of management reporting and data governance, internal controls specifically encompass the procedures that ensure reported data is accurate, complete, and has not been manipulated.

Why This Matters

Internal controls are the mechanisms through which an organisation can have confidence in its financial data. Without adequate controls, financial reports may contain errors that go undetected, data may be manipulated intentionally or unintentionally, and the organisation may face regulatory or audit findings that damage its credibility. A well-controlled reporting environment gives management, auditors, and other stakeholders justified confidence that reported figures accurately represent the underlying business reality.

Where This Fits

This term sits within the Data Governance & AI Readiness area of Performance & Control.

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