When should an organization consider revisiting its internal controls?

An organization should consider revisiting its internal controls whenever there are major changes in operations or risks because these changes can significantly impact the effectiveness and relevance of existing controls. For example, if a company undergoes a merger or acquisition, launches a new product line, or experiences shifts in market dynamics, the risks associated with operations may evolve. Revisiting internal controls in response to these changes ensures they remain effective in mitigating new or heightened risks.

Additionally, when there’s a significant increase in operational complexity or changes in technology, it’s crucial to reassess control measures. By proactively managing the internal control environment in light of operational changes or emerging risks, organizations can enhance security, compliance, and overall operational efficiency, thereby safeguarding assets and maintaining integrity in financial reporting. This approach promotes a culture of continuous improvement in risk management rather than a reactive or static compliance framework.