CIMA Official Learning System P3 — Performance Strategy （6）Internal Control

L EARNING O UTCOMES
After completing this chapter you should be able to:
? Discuss the purposes and importance of internal control for an organisation.
? Evaluate the essential features of internal control systems for identifying, assessing
and managing risks.
? Evaluate the costs and benefi ts of a particular internal control system.
? Discuss the importance of management review of controls.
? Discuss the principles of good corporate governance for listed companies, for con-
ducting reviews of internal controls and reporting on compliance.
6.1 Introduction
The main purpose of this chapter is to defi ne internal control and internal control systems,
with its links to the Combined Code and the role of the board in internal control. Whilst
Chapters 2 and 3 reviewed management and accounting controls generally, in terms of
Section A of the Performance Strategy syllabus, this chapter is concerned more with the
general principles of internal control as it relates to risk management, the subject of Part
B of the syllabus. The chapter contains a discussion of the limitations and cost-benefi t of
internal control and addresses the board’s responsibility for reviewing the effectiveness of
internal control and board effectiveness.