Controls Best Practices

What is a control?

Controls best practices state that to develop and maintain sound internal controls, it is important to gain an understanding of the day-to-day operations and the organization’s goals and turn them into controls. Control is something you do as an organization to mitigate potential risks. Control is part of a process designed to accomplish a goal.

For example, a goal might be to train your employees in the matter of security because it is important to safeguard data.

A control might read: Every year, security training is provided to all employees by the security officer.

Why are controls important?

An organization is best set up for success when it has strong internal controls. Controls help define an organization’s objectives and goals to ensure that employees are aware of and focused on them. Controls help minimize risks and protect an organization’s assets. This is because the organization implements controls to prevent risks and promote accountability.

Controls best practices

An organization’s internal controls look different for each organization. This is because each organization is unique in the way its day-to-day operations are performed. For example, one organization might use an automated tool to manage access to systems and tools, while another might use an Excel sheet to manually request a form to manage access.

Uniqueness is what makes developing an internal control framework an activity that requires focus and dedicated efforts.

To develop and maintain sound internal controls, it is important to gain an understanding of the day-to-day operations and the organization’s goals and turn them into controls.

Understand the objective of the goal

What are we trying to accomplish?’ must be the first question to address when understanding the purpose of a goal. The goal and/or activity can be a variety of things, such as:

1. Protecting and securing data
2. Remediating a risk
3. Have happy customers.
4. Increase revenue
5. Hiring new employees
6. Paying employees
7. etc.

Once the activity is understood, the next step is to think about the responsible personnel.

Assign ownership

Who would be responsible for accomplishing this activity? This is the next question to address to ensure that there is no oversight in the success of this goal. Once this question has been answered, you need to address how this can be achieved.

The ‘how’ is then translated into a series of steps to be taken to ensure the success of the activity. The control language is formulated based on a series of steps in an easy and succinct format. The format typically looks like this:

[XYZ] personnel are responsible for achieving [XYZ] goals and/or activities, and they can achieve this by doing [XYZ] steps.

Test your control

Now that your control is established, how do you validate that the oversight of this activity is successful? This is called ‘testing a control’ in compliance. The testing activities might include interviewing the responsible personnel and asking for proof of oversight.

These are the best practices for creating a control.