# Internal Controls

*Professional & Ethics — Finicade finance glossary*

Internal controls are the procedures that make errors and fraud hard to commit and easy to detect: segregation of duties, approval limits, reconciliations.

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.

**Also known as:** control environment, SOX 404 controls, segregation of duties

**Related terms:** [Audit](https://finicade.com/glossary/audit), [Operational Risk](https://finicade.com/glossary/operational-risk), [Compliance](https://finicade.com/glossary/compliance), [Three Lines of Defense](https://finicade.com/glossary/three-lines-of-defense), [Financial Statements](https://finicade.com/glossary/financial-statements)

Source: https://finicade.com/glossary/internal-controls