Final answer:
Internal control consists of measures implemented by a company to ensure the integrity of financial information, prevent fraud, and meet organizational objectives. Its principles are establishing a control environment, risk assessment, control activities, information and communication, and monitoring.
Step-by-step explanation:
Internal control refers to the processes implemented by an organization to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud. The purpose of internal controls is to manage risks and provide reasonable assurance that a company's objectives are met in the areas of operations, reporting, and compliance.
Principles of internal control include establishing a control environment, risk assessment, control activities, information and communication, and monitoring. Developing a control environment sets the tone of an organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control. Risk assessment is the identification and analysis of relevant risks to the achievement of objectives, forming a basis for determining how risks should be managed.