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According to Romney and Steinbart (2006, p. 192), the IC performs three
different types of controls:
Preventive
Controls,
which
deter
problems
before
they
arise.
Examples are
proper segregation of employee duties and effective control on physical access
to assets, facilities, and information.
Detective
Controls
are
needed
to
discover
problems
as
soon
as
they arise.
Examples include duplicate checking of calculations and preparing bank
reconciliations and monthly trial balances.
Corrective Controls remedy control problems that have been discovered.
Examples
are
maintaining
backup copies
of transaction
files
and
master
files
and sticking to procedures for correcting data entry errors.
2.4.2 Objectives of IC
The IC is implemented by the board of directors, management, and other
personnel in order
to provide
reasonable assurance that
the
following
control
objectives (Gay & Simnett 2005, p. 339) are achieved:
•
Risks are identified and minimized.
•
Management decision-making is effective and business processes are efficient.
• Transactions
are
carried
out
in
accordance
with
management’s
general
or
specific authorization.
•
Laws, rules and regulations are complied with.
•
Transactions
are
promptly
recorded
in
the
correct
amount,
in
the
appropriate
accounts and in the correct accounting period so as to allow the preparation of
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