The importance of risk assessment and internal control

Internal control is important because it can set a standard that must be followed by the
business to ensure that the business is operating according to its objectives. Having good internal
control can minimize risks and prevent unfavorable situations that will be beneficial to the
business. It will determine if the business follows appropriate policies or rules and regulations
that the business must comply with. Also, this will support the business in accomplishing its
goals by having better performance in its activities that are efficient and effective.

Having a risk assessment will inform a person and make the person aware of the risks
that a business has or may have. It is a way of analyzing those risks and evaluating how those
risks can be possibly eliminated. To reduce those risks, an internal control relating to the risk will
be appropriate to be implemented. Having a strong internal control will define a business that is
operating productively. Risk assessment and internal control are related to each other and both
useful in the operations of the business and also useful in decision making.