internal controls

Definition

Processes and procedures designed to prevent fraud, errors, and general financial chaos within an organization. They're like locks on doors—ineffective if someone with a key decides to rob the place, but they keep honest people honest.

Example Usage

The company's internal controls were so weak that the embezzlement continued for three years before someone noticed the CFO's new yacht.

Origin

Formalized in the mid-20th century, turbocharged after Enron and Sarbanes-Oxley made them legally mandatory.

Fun Fact

The most common internal control is 'segregation of duties,' which is fancy talk for not letting the same person write checks and reconcile the bank account.

Source: Audit and compliance terminology

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Write-Off

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actuarial

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expense

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non-performing asset

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