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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
JANURAY 2011
VOL 2, NO 9
dependability, improve operational efficiency, and ensure adherence to established
management policies (Al-Matarneh, 2006 ( .
The Auditing Methods Committee of the American Institute of Certified Public Accountants
(AICPA)defined the internal control as being involve the organizational plan, coordination
methods, measures followed to protect the assts, checking, and reviewing accounting data
check their accuracy, dependability, increase productive efficiency, and encourage employee's
adoption of established management policies (Abdallah, 2004 ( .
The Criteria Newsletter No. (55) published 1988 by the American Institute of Certified Public
Accountants (AICPA) defined internal control as policies and procedures designed to reach a
reasonable assurance that certain objectives of the organization can be achieved. This
definition did not state in detail objectives of the internal control, which instead was left to
administration. The statement "to reach a reasonable assurance that certain objectives of the
organization can be achieved" implies a limitation of the internal control, a reasonable but not
absolute possibility of reaching objectives (Mills, 1995 ( .
The essential goals of internal control that can be deduced from the earlier definitions
include -:
First: Organizational structure that outlines authorities, powers and responsibilities inside a
bank .
The existence of a clear organizational structure in the bank is recognized as very essential in
achieving internal control (management and accounting) that is supported by an integrated
organizational structure in the bank.
Second: Providing protection of bank's assets from embezzlement and fraudulent
manipulations while keeping equity of a third party.
Bank's assets can be reserved in different ways, but most often integrated protection measures
would be applied to preclude loss, damage, steal, or waste .
Third: Ensure presenting accurate accounting information based on which bank decision and
policymakers can depend .
Performance of bank operations results in a set of financial or non-financial processes that
subject to internal control. Fourth: Raise productive efficiency level of banking operations and
processes .
As its major goal, every bank has to raise, develop, and maintain productivity efficiency level,
make optimum use of its resources, and keep resources available to the bank from loss and
misuse by applying a number of methods including estimated budgets, standard costs, and
time-motion studies. To be effectively used, such methods should depend on reliable and
periodical reporting system ensuring steady flow of information through different
management levels. This, of course, requires providing employees training on how to achieve
their duties and improve their performance levels (Al-Sahen, 2004 ( .
Fourth: Encouraging compliance with policies, regulations, and administrative instructions in
effect at the bank .
No doubt, that different banking processes and activities depends on a set of rules, regulations
and policies abide to which need by a target for the internal control process.
8.2 Internal Control Departments at Jordanian Commercial Banks
� Internal Accounting Control
� Internal Administrative Control
� Internal Check
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