【正文】 rnal controls employed to achieve specific objectives. All managers use internal controls to help assure that their units operate according to plan, and the methods they usepolicies, SSRN, USA 2020 A Clear Look at Internal Control: Theory and ConceptsTop 10 Paper, First Quarterly 2020 3procedures, organizational design, and physical barriersconstitute. Internal control is a bination of the following:1. Financial controls, and2. Other controls According to the institute of chartered accountants of India internal control is the plan of organization and all the methods and procedures adopted by the management of an entity to assist in achieving management objective of ensuring as far as possible the orderly and efficient conduct of its business including adherence to management policies, the safe guarding of assets prevention and detection of frauds and error the accuracy and pleteness of the accounting records and timely preparation of reliable financial information, the system of internal control extends beyond those matters which relate to the function of accounting system. In other words internal control system of controls lay down by the management for the smooth running of the business for the acplishment of its objects. These controls can be divided in two parts . financial control and other controls.Financial controls: Controls for recording accounting transactions properly. Controls for proper safe guarding pany assets like cash stock bank debtor etc Early detection and prevention of errors and frauds. Properly and timely preparation of financial records I e balance sheet and profit and loss account. To maximize profit and minimize cost.Other controls: Other controls include the following:Quality controls.Control over raw materials.Control over finished products.Marketing control, etc2. Definition of internal controls There are many definitions of internal control, as it affects the various constituencies (stakeholders) of an organization in various ways and at different levels of aggregation.One of the definitions of internal controls is as follow: SSRN, USA 2020 A Clear Look at Internal Control: Theory and ConceptsTop 10 Paper, First Quarterly 2020 4Internal Control is a process affected by an entity39。s structure, work and authority flows, people and management information systems, designed to help the organization acplish specific goals or objectives. It is a means by which an organization39。Electronic copy available at: A clear look at Internal Controls: [Theory and Concepts] Hamed Arad (Philee)Department of accounting, Islamic Azad University, Hamedan, IranBabak JamshedyNavidFaculty Member of Islamic Azad University, Kermanshah, IranResearch Paper, July 2020, Social Science Research NetworkMarch 2020SSRN Digital Library, History of AccountingElectronic copy available at: SSRN, 2020 TOP 10 PAPER, Electronic copy available at: SSRN, USA 2020 A Clear Look at Internal Control: Theory and ConceptsTop 10 Paper, First Quarterly 2020 1 Social Science Research Network (SSRN)UNITED STATES OF AMERICA Hamed Arad (Philee)* (Corresponding Author)Department of accounting, Islamic Azad University, Hamedan, Iran Babak JamshedyNavidFaculty Member of Islamic Azad University, Kerman shah, IranJEL Classifications: M41 Submitted February, 2020 Date posted: February 13, 2020。s resources are directed, monitored, and measured. It plays an important role in preventing and detecting fraud and protecting the organization39。s board of directors, management and other personnel designed to provide reasonable assurance regarding the achievement of objectives in the following categories namely. Effectiveness and Efficiency of Operations Reliability of Financial Reporting Compliance with Applicable Laws and Regulations In AU Section 319 Consideration of Internal Control in a Financial Statement Audit internal control described as: Internal control is a process—effected by an entity’s board of directors, management, and other personnel—designed to provide reasonable assurance regarding the achievement of objectives in the following categories: (a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) pliance with applicable laws and regulations.According AU section 319 internal control consists of five interrelated ponents:a. Control environment sets the tone of an organization, influencing the control consciousness of its people. It is the foundation for all other ponents of internal control, providing discipline and structure.b. Risk assessment is the entity’s identification and analysis of relevant risks to achievement of its objectives, forming a basis for determining how the risks should be managed.c. Control activities are the policies and procedures that help ensure that management directives are carried out.d. Information and munication systems support the identification, capture, and exchange of information in a form and time frame that enable people to carry out their responsibilities.e. Monitoring is a process that assesses the quality of internal control performance over time.Several key points should be made about this definition:1. People at every level of an organization affect internal control. Internal control is, to some degree, everyone39。s control. Under the COSO Internal ControlIntegrated Framework, a widelyused framework in the United States, internal control is broadly defined as a process, effected by an entity39。 reconciliations。 preventing or detecting error or fraud. Controls within a process may consist of financial reportin