What is meant by internal control in financial management?

Internal control in financial management refers to the processes and systems implemented by an organization to safeguard its assets, ensure the accuracy and reliability of financial reporting, and promote operational efficiency. This encompasses a range of procedures designed to prevent errors and fraud, as well as to ensure that financial transactions are recorded consistently and accurately over time. By maintaining robust internal controls, organizations can monitor their financial activities, safeguard their resources, and enhance the overall integrity of their financial statements.

Option B specifically captures this definition by emphasizing the safeguarding of assets and the maintenance of accurate records, which are fundamental aspects of internal control systems. Overall, effective internal controls are essential for risk management and serve to enhance transparency and accountability within an organization’s financial practices.