Planning and organizing involve the establishment of objectives and goals and the use of such tools as organization charts, flowcharts, procedures, records, and reports to establish the flow of data and the responsibilities of individuals for performing activities, establishing information trails, and setting standards of performance. Directing involves certain activities to provide additional assurance that systems operate as planned. These activities include authorizing and monitoring performance, periodically comparing actual with planned performance, and appropriately documenting these activities. Management ensures that its objectives and goals remain appropriate and that its systems remain current. Therefore, management periodically reviews its objectives and goals and modifies its systems to accommodate changes in internal and external conditions.
Management establishes and maintains an environment that fosters control.
Internal auditing examines and evaluates the planning, organizing, and directing processes to determine whether reasonable assurance exists that objectives and goals will be achieved. Such evaluations, in the aggregate, provide information to appraise the overall system of control. All systems, processes, operations, functions, and activities within the organization are subject to internal auditing's evaluations. Internal auditing performs evaluations at specific points in time but should be alert to actual or potential changes in conditions which affect the ability to provide assurance from a forward-looking perspective. We wish to acknowledge the contributions to the literature on control made by various professional organizations, internal and external auditors, members of academe, firms, and individuals.