Entity Level Controls – What Are They And Why Do They Matter?

As an individual (in a sole proprietorship), it is easy for you to shape your business based on your own internal rules, vision and ethics. As your business grows, it must move from informal decisions and processes accomplished by one person to formal structures necessary to guide the choices of many.

These are entity level controls – internal controls that help ensure management directives are carried out.

What Does an Entity Level Control Look Like?

If entity level controls guide a business, then many different systems and processes can be entity level controls with these controls ranging from risk management systems, to financial reporting processes, to monthly meetings. Anything that monitors, guides and controls operational and financial results is an entity level control.