More specifically, an overall system of internal control is an integrated collection of control systems used by an organization. It is all the methods and measures adopted to accomplish the five major objectives of a system of internal controls. However, internal controls are usually broken down into accounting controls and administrative controls. Accounting controls refer to the actual policies and procedures which must be followed. Administrative controls comprise the plan of the organization and the methods that are concerned with operational efficiency and adherence to management policies and applicable laws.
Internal controls are also either detective, corrective, or preventive by nature.
Detective controls are designed to detect errors or irregularities that may have occurred. Corrective controls are designed to correct errors or irregularities that have been detected. Preventive controls, on the other hand, are designed to keep errors and irregularities from occurring in the first place. Internal Control Concepts Internal control consists of five interrelated components, each of which is an integral part of the management process and plays a specific role in departmental internal control procedures. This sets the tone of the organization, influencing the control consciousness of its people.