Internal controls on risk management

An organization‘s internal controls are designed to manage internal risk. Internal controls facilitate effectiveness and efficiency of operations and contribute to delivery of risk objectives.

They are put in place to manage both internal sources of risk and the impacts of external sources of risk.
Internal control systems should cover the following key areas:

1. The nature and extent of the risk facing the organization.
2. The extent and categories of risk that is acceptable to bear.
3. The likelihood of the risk occurring.
4. The organization‘s ability to reduce the impact on the business of risk that do materialize.