An analysis of effective internal control programs in organizations

November 25, Control Plans Most organizations are good at rallying around chronic problems and finding solutions. But long term discipline in sustaining those solutions is a different story — all too often a process will slowly return to its original state as the path of least resistance takes control in the manufacturing environment. This is where control plans come into play: What is a Control Plan?

An analysis of effective internal control programs in organizations

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Organizational Analysis Models[ edit ] Strategic Triangle Model[ edit ] This model relies on three key calculations to determine the efficiency and effectiveness of an organization.

First, is the value, or mission, that guides the organization. Second, is operational capacity, the knowledge and capability to carry out the mission. Third, is legitimacy and support, or the environment, that authorize the value of the organization, and offer support, specifically financial support.

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Using this model, a strategy for an organization is considered good if these three components are in alignment. A SWOT analysis can be carried out for a product, place, industry or person.

It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The degree to which the internal environment of the entity matches with the external environment is expressed by the concept of strategic fit.

If the objective is not attainable a different objective must be selected and the process repeated. Users of SWOT analysis need to ask and answer questions that generate meaningful information for each category strengths, weaknesses, opportunities, and threats to make the analysis useful and find their competitive advantage.

The McKinsey 7S Framework emphasizes balancing seven key aspects of an organization, operating unit, or project.

An analysis of effective internal control programs in organizations

The remaining four elements—shared value, staff, skill, and style—are fluid, difficult to describe, and dependent upon the actors within the organisation at any given time. The 7S organisational analysis framework is based on the premise that all seven elements are interdependent, and must be mutually reinforcing in order to be successful.

Changes in a single element can result in misalignment and dysfunction throughout the organisation, disrupting organisational harmony. Taylor was the father of time-and-motion studies and founded an approach he called " scientific management. These Scientific Management principles served a valuable purpose for the Ford Motor Companywhere the first American, mass-produced automobiles were being created.

Natural System Model[ edit ] The natural system model is in many ways the opposite of the rational model in that it focuses on the activities that may negatively impact the organization and therefore aims at maintaining an equilibrium in order to meet its goals.

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The parts of the organization are not seen as independent units but rather as a whole that can orchestrate together to prepare for inevitable change. Sociotechnical Model[ edit ] The sociotechnical model, also known as Sociotechnical Systems STSis an approach to complex organizational work design that recognizes the interaction between people and technology in workplaces.

This model identifies the environment as a key factor that interacts with the organization. Cognitive Model[ edit ] Behavior, cognitive, and other personal factors as well as environmental events, operate as interacting determinants that influence each other bidirectionally.

Decision making processes are focused on and specialization is deemed as important to the flow of information.

An analysis of effective internal control programs in organizations

Based on a theorized blindness of a single perspective, Lee Bolman and Terrence Deal have designed a model that splits analysis into four distinct paradigms.

Structural Frame Here organisations are to be understood by role definitions and clear hierarchy. Problems come from overlapping responsibilities and unclear instructions.

The assumptions are similar to the rational model shown above and Taylorism. Human Resource Frame According to this frame organisations exist to serve society, they are places for growth and development.

Problems come from when people are not motivated or trained sufficiently. This is Similar to the Sociotechnical model, or the work of Daniel Pink. Political Frame this frame posits that organisations are cutthroat jungles, where only the strongest survive. Problems come from poor power coalitions or overly centralized power.

Symbolic Frame This frame supposes that organisations are deeply symbolic and successful business is about the representation genuine meaning.

Problems occur when actors fail to play their parts.Once the manager has determined what controls exist or has established new controls, the next step is to assess their effectiveness (see IRM , Review/Assess Internal Control). The assessment and review of internal control is an ongoing process.

This analysis will: (1) describe the importance of internal control programs, (2) identify effective internal control techniques, (3) illustrate the relationship between ethics and internal control techniques, and (4) describe the importance of the Sarbanes-Oxley Act.

Introduction The Certified Internal Control Specialist (CICS) and Certified Internal Control Professional (CICP) programs were developed by leading internal. internal control. Effective internal control also helps our previously issued “Standards for Internal Controls Risk assessment is the identification and analysis of relevant risks associated with achieving the objectives, such as those defined in strategic and.

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Understanding Internal Controls - SUNY