Standards of Internal Controls - Arizona State University

II. OBJECTIVE
Good internal controls are fundamental to achieving our key initiatives and goals. Utilizing good controls
as included in this document can help eliminate bottlenecks, redundancies, and unnecessary steps. Controls
can prevent loss of resources, including capital assets, inventory, proprietary information, and cash. They
can help ensure compliance with applicable laws and regulations. Periodic audits against the control
guidelines can ensure that a process in control stays in control.
The objective of this document is to provide a resource to our citizenry that will help assure the existence of
basic and consistent internal controls throughout the university. This initial edition of the Standards of
Internal Control is the product of the continued efforts of numerous associates in various functions
throughout the university. The control criteria included were written in a manner to satisfy the basic
objectives of our system of internal control. This system recognizes the need to comply with the
expectations of our students, alumni, vendors, faculty/staff and our community. The Audit Committee of
the Arizona Board of Regents, the State of Arizona Office of the Auditor General, University Audit and
Advisory Services, (UAAS), the Financial Controls division of Financial Services and each Business
Administrator (BA) across the university are responsible for monitoring our adherence to these standards.
III. SCOPE
These standards are applicable to all campuses, colleges, services and departments. The standards
generally reflect control objectives and do not attempt to describe the specific techniques required in each
area.
These internal controls are designed to provide reasonable, but not absolute, assurance regarding the
safeguarding of resources, reliability of operating and financial information, and compliance with laws and
regulations. The concept of reasonable assurance recognizes that the cost of a control should not exceed
the benefit to be derived. It also recognizes the need for uncompromising integrity, good business
judgment, and a culture of good control practices.
In management's selection of procedures and techniques of control, the degree of control employed is a
matter of reasonable judgment. When it may be impractical or impossible to institute any of the controls
listed, as could be the case of a small or remote operation/department, management should choose among
the following alternatives:
• Improve existing controls through increased supervision and audits;
• Institute alternative or compensating controls; and/or
• Accept the risks inherent with the control weakness.
IV. PROCESS
The controls in this document should not, as indicated by the internal control wheel, be considered to be
"stand alone". Together, Internal Control Standards, university policy and procedures manuals, and
departmental rules should be considered part of the process for installing, maintaining, and improving our
system of internal control.