Saturday, August 4, 2012

Internal Control Systems for Business Risk Management Features-Turnbull Report

Turnbull (UK) report gives guidance on feature of sound system of internal control and risk management. Internal control system and business risk management should be embedded into the culture of the company and its activities. Internal control system and business risk management should form an integral part of the culture of company. Internal control and business risk management should not be considered as separate activity rather it should be considered as important as the work itself. Internal control and risk management procedures or activities should be part of every employee’s job description. Policies and procedures regarding risk management and internal controls should be communicated to everyone inside the company. Internal control system and business risk management should be able to respond quickly to new and changing risks. Speed with which business adopts itself to changing environment is important for the achievement of business objectives. Internal control system and business risk management should have ability to report any control system failings and weaknesses in timely manner. Employees should be able to report to management at appropriate levels. Failure to report on the performance of internal control and risk management system will compromise the soundness of internal control and risk management system towards the achievement of objectives.