Internal Control - Theoretical and Organizational Perspectives in Business Group

Based on a logical idea, doing business means taking risks. Risks can be understood as any influencing factor which prevent the company from reaching its objectives. In general, risks can be addressed in three different ways: avoid, insure and reduce risks. Internal controls represent the third option and the focus is on reducing risks by reducing the probability of occurrence. Through internal control, the company’s management appraise the progress in reaching the objectives, ascertains the deviations, analyzes the determining causes and led the necessary corrective measures.