Internal controls are defined by COSO as a process, effected by an entity’s board of directors (regents), management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: Effectiveness and efficiency of operations; Reliability of financial reporting; and, Compliance with applicable laws and regulations.
But what is internal control in layman's terms-since my wife doesn't understand what I do, I had to think more about this. And using everyday processes, I explain internal controls as the locks on doors, passwords for computer access, and signatures on checks to pay bills.
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