EFFECT OF INTERNAL CONTROL SYSTEM ON ORGANIZATIONAL PERFORMANCE

📄 Project Abstract

Board of directors represents all shareholders to oversee management and are obligated to report to the owners (shareholders) on how their business has been managed. However, most of the directors are very busy to participate actively in daily operation of the company; therefore, they are not able to control management adequately. Consequently, most companies set up an audit committee to assist board of directors in the supervision of management. The audit committee checks financial reporting procedures, internal control system, internal auditing and external auditing. The internal auditing department is an important information source for audit committee. Internal control was assumed in as an element of internal auditing organizations. Internal control systems are established as an effective internal audit unit that will curtail risk exposures to an acceptable level given the company's objectives. Internal audits including internal control systems are primarily purposed to improve the...