As organizations rely more heavily on integrated systems, automation and remote access, risk exposure increases. Cyber incidents, data integrity issues and financial reporting errors can escalate quickly without clearly defined controls. A well-designed internal control framework helps organizations manage these risks while supporting reliable operations and decision-making.
Internal controls are the backbone of operational resilience. They consist of systems, policies and procedures designed to manage risk and support organizational objectives. These controls typically fall into three categories: preventive, detective and corrective.
These controls are designed to proactively prevent errors and fraudulent activities before they occur.
Key examples include:
Detective controls serve as the organization’s early warning system. They help uncover problems that have already occurred, enabling timely intervention and minimizing impact.
Examples include:
When issues are identified, corrective controls come into play to resolve them and prevent recurrence.
Examples include:
Internal controls are not just about compliance. By implementing a balanced mix of preventive, detective and corrective controls, organizations can build resilience, protect operations and strengthen trust in participants or members, management and governance boards.
This article is the first in a series examining the evolving landscape of internal controls. Be sure to explore the additional articles in the series, Aligning Controls With Risk: A Framework for Employee Benefit Plans and Labor Organizations and Implementing Effective Controls: Best Practices for Employee Benefit Plans and Labor Organizations, for further insights and practical guidance.
For more information on this topic, please contact a member of our team.
For employee benefit plans (EBPs), implementing controls that are both practical and responsive to their unique risk profiles is key. A well-designed control environment can help organizations manage risk while supporting compliance and operational objectives. Balancing Preventive and Detective Controls A well-designed control environment includes a mix of preventive and detective controls: The right balance…
As another employee benefit plan audit season gets underway, plan sponsors have a valuable opportunity to get ahead of the issues that most frequently surface during a retirement plan audit. A little preparation now can prevent findings, corrections, and uncomfortable conversations later. Below are three areas that consistently draw scrutiny and where a proactive review…
Withum team members, clients and community leaders, including representatives from Howard County and the Central Maryland Chamber, came together to mark the official “door opening” on the new location. The ribbon-cutting ceremony highlighted the evening, which featured citations presented by community leaders welcoming Withum to the Columbia region and recognizing its strong ties to the…
