Managing risks, protecting businesses

Establishing and implementing an internal control system

Find out what a comprehensive internal control system should include and how to set one up.

hsp Handels-Software-Partner GmbH

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Managing risks, protecting businesses

Establishing and implementing an internal control system

Find out what a comprehensive internal control system should include and how to set one up.

Internal Control System (ICS) explained simply

What is an internal control system?

An internal control system (ICS) comprises the organisational measures, processes and procedures that an organisation implements to monitor its business operations, manage risks, ensure compliance and safeguard the efficiency and integrity of its financial reporting.

When is an internal control system mandatory?

In many countries and sectors, an internal control system (ICS) is not only recommended but, in many cases, also required by law. This applies in particular to listed companies or companies in regulated sectors. The aim of the legislator is to ensure the integrity of financial reporting and compliance with legal requirements.

What is ICS software?

Internal control system (ICS) software is a specialised software application that provides functions for documenting processes, assessing risks, monitoring business processes and reporting on compliance.

About the author

Paul Liese
Paul Liese
hsp Software

Paul Liese is the managing director of hsp Handels-Software-Partner GmbH in Hamburg. For many years, he has been involved in the Software and IT specialist with the topics relating to electronic invoicing. These include, in particular, procedural documentation, Tax CMS, transfer pricing and the internal control system. Together with his team, Paul Liese is working on the Elimination of all media breaks in accounting.

Keeping all risks under control, step by step

Internal Control System (ICS): everything you need to know

An internal control system (ICS) is a framework that helps organisations to organise their business processes more effectively and efficiently. At the same time, it helps to minimise risks and ensure compliance with laws and regulations. This includes both formal and informal processes and procedures that ensure the organisation’s objectives are achieved.

An ICS is used in many areas, such as financial accounting, production, human resources and compliance. It can encompass both manual and automated processes, such as the preparation of financial reports, the monitoring of production processes or the carrying out of background checks on job applicants.

The best software for ICS: get free advice

Use the intelligent Opti.Tax software solution to build a dynamic internal control system step by step. In a personalised live call, we’ll show you the software and assess whether Opti.Tax is suitable for your specific needs – free of charge and with no obligation, of course.

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Risk assessment and legal requirements

Risk assessment is an essential component of an internal control system. Companies must first identify and assess their individual risks in order to then implement appropriate measures to minimise these risks. These include contingency plans, regular staff training and specific control mechanisms in day-to-day operations. An ICS also serves to ensure that a company complies with all laws and regulations. These include, amongst other things, tax and employment law, as well as environmental regulations.

By establishing and implementing an internal control system, companies ensure that clear rules and processes are in place and are adhered to. This makes it more difficult to commit breaches and helps to avert fines or damage to their reputation.

Efficient documentation, improved processes

Objectives of an internal control system

Optimising processes

  • Structuring processes, establishing clear lines of responsibility and reducing duplication of effort
  • Improving efficiency and quality through standardised procedures
  • Save time and money by systematically eliminating sources of error and bottlenecks

Ensuring reporting is secure

  • Ensuring the completeness and accuracy of figures and information
  • Building confidence in reports and analyses, both internally and externally
  • provide a reliable basis for well-informed decisions and financing

Minimising risks

  • identify potential risks at an early stage and take targeted action to counter them
  • to protect the company’s assets from losses and damage
  • Ensure compliance with laws, regulations and internal rules in order to avoid fines

Internal control system: Is a checklist useful?

When the internal control system is under scrutiny, checklists form the basis for assessing the ICS and the current status. However, as every organisation is different, elements can be added to or removed from a template.

Use the checklist for the ICS audit

The questions that may arise during an ICS audit are as varied as the companies themselves. General questions, such as those relating to risk management in the IT sector, may apply to almost any company. Some specific questions, such as those concerning a vehicle fleet policy, are not relevant to many digital start-ups.

Nevertheless, sample checklists for the audit are publicly available and cover, for example, the following areas:

  • Organisational structure

  • Process organisation

  • Asset Management

  • Safeguards

  • Safety and Insurance
  • Accounting
  • Cash and banking transactions
  • Liabilities
  • Purchasing – Goods Receipt
  • Warehousing

  • Stock-taking

  • Production

  • Sales/Distribution

  • Vehicle fleet

  • Business trips

  • Entertainment, hospitality, promotional gifts

  • Human Resources, Payroll

  • IT & Security – General

  • IT & Security – System Security

  • IT & Security – System Security

  • IT & Security – Programme Security

  • IT & Security – Data Security

The superior ICS software

Discover Opti.Tax for your internal control system

Explained briefly and concisely

Why are so many ICS professionals so enthusiastic about Opti.Tax? Watch the video to see how the software makes it easier for you to set up your ICS.

Why is an internal control system needed?

The internal control system is not just a ‘nice-to-have’: for most limited companies, establishing and monitoring an internal control system is a legal requirement (Section 91 of the German Stock Corporation Act (AktG)). However, it is a ‘good-to-have’, as the internal control system is practically indispensable for business success.

  • Hazard prevention: minimises the risks that could weigh on and/or jeopardise a company
  • Process optimisation: improves the effectiveness and efficiency of business processes
  • Respect for the law: ensures that the company complies with applicable laws and regulations
Torsten Stockem, Energy Law Firm

Of course, individual risks are important, but if I don’t go through the process, I might end up dealing with risks that aren’t even worth addressing.

Torsten Stockem
Tax adviser, energy consultancy

5 good reasons for an internal control system:

Risk management
An internal control system helps organisations to identify, assess and minimise their risks. This can be achieved by organising training sessions, drawing up contingency plans and putting controls in place.
Financial control
An internal control system ensures that financial reports are prepared accurately and that financial processes run effectively and efficiently. This enables companies to ensure that they have their finances under control and that they have sufficient resources to achieve their objectives.
Compliance with laws and regulations
An internal control system ensures that companies comply with all applicable laws and regulations. This protects companies from penalties and prosecution that may result from breaches.
Improving business processes
An internal control system helps companies to optimise their business processes and make them more effective. This can be achieved by implementing standards and procedures that enhance the efficiency and effectiveness of business processes.
Increased transparency

An internal control system increases transparency within a company. It enables companies to closely monitor and control their business processes and finances.

Efficient, convenient, seamless

Opti.Tax: the software solution for a dynamic ICS

Internal Control System (ICS): Import sample risks

Make use of the sample risks provided by the law firm Energiesozietät

Why start from scratch when there are already hundreds of tried-and-tested real-world examples? That is precisely why the Düsseldorf-based law firm Energiesozietät provides us with sample risk scenarios, which you can access at any time in Opti.Tax. And more are being added all the time – at no extra cost to you.

Internal Control System (ICS): Create a risk proposal using the AI assistant

Generating risks using AI

It’s becoming increasingly difficult to start with a blank sheet of paper. Why not let the system suggest risks for you to take on or address in future? You can generate individual risks for different tax types, or for all of them at once. It couldn’t be more convenient.

Internal Control System (ICS): Dashboard in the Opti.Tax Cloud

Convenient collaboration via the cloud

Using the Opti.Tax Cloud, you can easily assign tasks to individual staff members, such as checking reconciliations. The person carrying out the task can easily access a clear and intuitive user interface via a web browser. Both task management and communication with the team take place seamlessly via a single hub.

The software solution for secure risk management

Why IKS makes a difference with Opti.Tax

Process documentation is a prerequisite for implementing an internal control system. Only once a company’s processes have been documented can you identify the risks associated with each step and successfully minimise them.

In many companies, processes exist only in theory – usually filed away somewhere and forgotten in day-to-day operations. With Opti.Tax Build a dynamic, sustainable system that involves all stakeholders and operates in a sustainable manner.

  • standardised, transparent processes

  • fewer errors, higher quality of work

  • Working in a way that is audit-proof and compliant with the internal control system

  • Hundreds of sample risk scenarios are available, drawn up by the law firm Energiesozietät (Düsseldorf)
  • Safety for the company and its staff

  • Future-proof thanks to scalable structures

  • Allocating tasks via Outlook and Teams

Developed for you in Hamburg

Why so many professionals put their trust in hsp
Julian Rodewald is our support team leader

Excellent support

A software solution is only as good as the support that comes with it, particularly when it comes to specialist software. That is why we offer you:

  • Comprehensive onboarding with a personal appointment for you or your staff
  • Personal assistance from our support team led by Julian Rodewald

  • A comprehensive help centre with countless technical questions and answers about the software

ADKL: Tax advisers Lisa Hägele and Tobias Polka use the Opti.Tax software

Unrivalled practical relevance

Only experts know what professionals like you really need. That is why we work with leading law firms:

  • Experts in the field support our software development

  • Strong partners: ADKL, Energiesozietät, Schröder & Partner, Clostermann & Jasper, and others.

  • New features are regularly implemented in response to customer requests

Two software developers from hsp at their workstations

Made in Germany

Our development, testing and support teams are based in Hamburg. Our servers are located in Munich. There are good reasons for this:

  • All data is processed in accordance with strict EU legislation and the GDPR

  • You need to be able to rely on software and support – and that’s only possible locally

  • We need to be just as familiar with German laws and regulations as you are

Free of charge and with no obligation

Book a consultation now

Let’s work together to find out how you can successfully use Opti.Tax for your internal control system (ICS) in your specific circumstances.

  • in person

  • free of charge

  • in detail

Book your no-obligation consultation now and find out more about Opti.Tax:

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Can't find a suitable date, or is the calendar not working?

Free of charge and with no obligation

Book a consultation now

Let’s work together to find out how you can successfully use Opti.Tax for your internal control system (ICS) in your specific circumstances.

  • in person

  • free of charge

  • in detail

Book your no-obligation consultation now and find out more about Opti.Tax:

Packshot of the Opti.Tax software documentation

Can't find a suitable date, or is the calendar not working?

More on the subject of internal control systems

Internal control system: Added value for law firms and clients

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Internal Control System: The Path to Security for Tax Practices

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Why your business needs an internal control system (ICS) – and what benefits it brings

Companies grow and gradually develop their processes, whilst neglecting to put the necessary safeguards in place. At some point, a company that has grown organically finds itself without any safety nets built into its processes. This article explains how an internal control system can help.

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FAQ – Frequently Asked Questions

Frequently asked questions about the Internal Control System (ICS) with Opti.Tax

An internal control system (ICS) comprises measures, rules and procedures within a company designed to identify and prevent errors, risks and breaches of regulations at an early stage.

An effective internal control system enhances security, supports compliance with legal requirements (e.g. GoBD, GDPR, ISO) and helps to protect corporate assets. It can also help to reduce liability.

Our software makes it easy to set up, manage and audit a bespoke internal control system. It offers predefined processes, risk analyses, action planning, workflows and audit-proof documentation.

No, small and medium-sized enterprises (SMEs) also benefit from an internal control system – particularly as digitalisation increases and business processes become more complex.

Thanks to templates and straightforward user guidance, the initial set-up can often be completed within a few hours. The time taken depends on the size of the company and the complexity of the processes.

Yes, existing processes can be imported, customised or combined with the templates in the software.

Yes, the Opti.Tax software complies with relevant standards such as GoBD, BAIT and MaRisk, as well as the BSI’s requirements for an internal control system.

The software enables you to document processes, responsibilities and controls in a transparent and audit-proof manner – this makes communication with auditors significantly easier.

Yes, there are integration options with DATEV, DMS systems or Microsoft 365, for example for task management.

Yes, the software was developed for law firms and businesses and supports the management of multiple clients, each with their own processes and documentation.

hsp offers webinars, personalised introductions, e-learning and support from ICS experts – from the initial consultation right through to implementation.

Prices depend on the size of the law firm or company. We offer flexible licensing models and a personalised quote tailored to your needs. Take advantage of the Contact form Thank you for your enquiry; we’d be happy to offer you personalised advice.

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About hsp – Software innovation made in Germany

We eliminate media breaks for you

Since 1991, hsp Handels-Software-Partner GmbH has been developing professional software solutions for tax consultancy and audit firms, as well as for businesses.

Our taxonomy software Opti.Tax has established itself amongst discerning professionals in the DACH region as the reliable, high-performance and long-term solution for electronic invoicing. The digital tools for legally required, GoBD-compliant documentation are particularly popular.

Practical relevance, up-to-date content and genuine service

Our software modules are developed in close collaboration with experienced partner firms such as Energiesozietät GmbH for internal control systems (IKS), ADKL Abels Decker Kuhfuß & Partner mbB for transfer pricing, and Schröder & Partner for the digital pension file. In this way, we ensure that the features in Opti.Tax are tailored to the real-world challenges of day-to-day professional practice.

Regular updates ensure that changes to legislation and new requirements are incorporated into the software in a timely manner. In addition, we support you with a comprehensive range of service and support offerings, e-learning courses, access to the hsp Community, our weekly live broadcast „hsp live at 11“ and much more.