Internal Controls
Also called: control environment, SOX 404 controls, segregation of duties
Internal controls are the procedures that make errors and fraud hard to commit and easy to detect — segregation of duties, approval limits, reconciliations, system access rules. Their defining principle is that no single person should be able to initiate, approve and record the same transaction. Every major rogue trading loss, from Barings to Société Générale, traces back to someone who could do exactly that.