Internal control in auditing refers to the process of assuring an organizations objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations, and policies. It is a means by which an organizations resources are directed, monitored, and measured, and it plays an important role in detecting and preventing fraud and protecting the organizations resources, both physical and intangible. Internal control is a process that involves everything that controls risks to an organization. It is effected by people at every level of an organization, and it can provide only reasonable, not absolute, assurance to an entity’s management and board.

Internal controls are established to further strengthen the reliability and integrity of information, compliance with policies, plans, procedures, laws, and regulations, and the safeguarding of assets. The internal control structure consists of five inter-related components: control environment, risk assessment, control activities, information and communication, and monitoring.

Internal auditors and external auditors measure the effectiveness of internal control through their efforts. They assess whether the controls are properly designed, implemented, and working effectively, and make recommendations on how to improve internal control. They may also review information technology controls, which relate to the IT systems of the organization.

In summary, internal control in auditing is a process that involves everything that controls risks to an organization. It is a means by which an organizations resources are directed, monitored, and measured, and it plays an important role in detecting and preventing fraud and protecting the organizations resources. Internal control is established to further strengthen the reliability and integrity of information, compliance with policies, plans, procedures, laws, and regulations, and the safeguarding of assets. Internal auditors and external auditors measure the effectiveness of internal control through their efforts.