Communication must occur in the broadest sense, flowing up, down, and across the organization, and communication must be effective both inside the organization and external to it. Monitoring - This involves assessing the quality of all systems' performance over time. All internal control systems must be monitored, with ongoing and periodic evaluations being conducted. Effectiveness Internal controls help UT-Houston achieve its performance targets and prevent loss of valuable resources. Limitations Internal controls do not provide absolute assurances-they help an entity achieve its objectives but do not ensure success, survival, or absolute reliability of financial reporting and compliance, only reasonable assurance.
Internal controls are subject to a number of potential failures.
The final, overriding limitation of internal controls is one of cost. With scarce resources, the benefits from internal control systems must be considered relative to the cost of implementing and maintaining those systems. Summary Internal controls are essential processes within any successful organization. They are everyone's responsibility. Internal control systems comprise a number of related components that are all dependent on each other.