Why You Need an Internal Control System

In today’s fast-paced business world—where governments, investors, and auditors demand transparency—an internal control system (ICS) isn’t optional. It's a strategic asset for effective governance, compliance, and performance.

What Is an Internal Control System?

An ICS is a structured framework of policies, procedures, and activities designed to ensure:

• Reliable financial reporting
• Operational efficiency and effectiveness
• Compliance with laws and regulations
• Safeguarding of assets

It’s based on widely accepted frameworks like COSO, which includes control environment, risk assessment, control activities, information & communication, and monitoring. Control environments set ethical standards and accountability, while control activities like approval workflows prevent errors or fraud.

Why Internal Controls Matter

1. Proactive Risk Mitigation

ICS helps pinpoint and respond to risks before they become real problems—preventing financial misstatements, fraud, regulatory violations, and operational failures.

2. Improved Financial Integrity

Controls like segregation of duties, reconciliations, and automated approvals support accurate and auditable financial processes.

3. Regulatory Compliance

With increasingly complex regulations—such as SOX, TCMS in Germany, or the UK Corporate Governance Code—controls help demonstrate accountability, standardize execution, and support audit readiness.

4. Operational Efficiency

Automated, well-documented control workflows reduce rework, errors, and time wasted chasing approvals or documentation.

5. Stakeholder Confidence

Transparent controls build trust with your board, investors, customers, and regulators by showing that risks are managed, assets are safeguarded, and governance is strong.

Building Better Controls: Lessons from Impero Users

From Spreadsheets to Scalable Control Environment

As Penneo prepared for its IPO, CFO Casper Nielsen Christiansen recognized that relying on Google Sheets for documenting internal controls would no longer suffice. He noted:

When you go public, it is not enough to just know the numbers – you need to be able to document everything you do and show that you have control of your processes, key tasks and controls.

With Impero, Penneo gained clarity and structure:

It has given us a much better and more transparent overview...The system gathers everything in an intuitive dashboard that shows our controls. It makes it easy to document that the task has been performed on time and with high quality.

After just one month of implementation, Penneo had a structured framework that met regulatory standards while embedding controls into day-to‑day operations. The system scaled with the business, helping Penneo remain audit-ready without slowing down workflows.

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Efficient Control Management Ahead of Listing

As a biotech company moving toward a public listing, Alvotech aimed to streamline its internal control processes across global teams. As one executive explained:

It’s often said from SOX perspective that if it wasn’t documented it wasn’t done. Impero is very helpful in this context, as we can document everything in addition to us having everything time-stamped, with a full audit trail and change logs.

Their view of Impero was clear:

Selecting a system like Impero is a no-brainer. You’re investing a lot of money preparing for listing, so why not use the opportunity to address the control management at the start so you can see the benefits sooner?

Alvotech’s experience shows how Impero enables an efficient, transparent control environment that delivers audit readiness and long-term value.

These two stories underscore how a modern ICS—backed by a platform like Impero—delivers real-world accountability, audit readiness, and clarity.

How Impero Supports an Effective Internal Control System

Impero is designed around the building blocks of ICS—risk assessment, control activities, reporting, and monitoring—with powerful automation and visibility:

• Risk Assessment: Impero enables you to assess and document risks at scale using a dedicated risk directory, helping teams identify and prioritize areas of concern across the organization.
• Control Activities: You can create and schedule control programs automatically, assign responsibilities, and ensure that controls are consistently executed by the right people at the right time.
• Reporting & Monitoring: Real-time dashboards and automated reports give you a clear view of control status, making it easy to track progress and identify overdue or incomplete tasks.
• Audit Trail & Accountability: Every action is logged with a timestamp, ensuring traceability and visibility across the three lines of defence. This strengthens oversight and supports both internal reviews and external audits.

An internal control system is no longer purely a compliance tool—it’s a governance backbone that supports risk-aware decision-making, operational discipline, and stakeholder trust.

Ready to strengthen your internal control system? Book a demo to see how Impero can help you simplify compliance and stay audit-ready.