When your company first started, it was easier to keep a pulse on everything. You knew who was handling what, decisions happened quickly, and financial oversight was manageable with just a few people involved. Internal controls? They were probably the last thing on your to-do list—and back then, that made sense.
But as your company grows—more clients, more team members, more complexity—those informal systems that once worked so well start to show their limits. This is the stage where internal controls become essential for protecting your business and supporting smart, sustainable growth.
Here are 10 common misconceptions about internal controls that growing companies face (and the truth behind them!):
1. “Internal controls are only for big corporations.”
The truth: Every company with assets to protect and financial reports to produce needs strong internal controls. They’re not just for public companies—they’re for any business that’s serious about growth, sustainability, and risk management.
2. “Our CPA handles that.”
The truth: Outsourcing your accounting or tax work to a CPA firm is smart—but it’s not a substitute for internal oversight. Your CPA isn’t part of your control environment and shouldn’t be responsible for reviewing or approving transactions, managing access to funds, or monitoring your internal workflows. For audit and tax clients especially, CPAs are explicitly not allowed to be relied upon for internal controls. Your company still needs documented processes, active review, and internal accountability—whether you have a full-time controller or a lean finance team.
3. “We trust our people, so we don’t need controls.”
The truth: Internal controls are not about distrust—they’re about structure and protection. Even the most trustworthy team member can make an honest mistake, and no one should be put in a position where they could be tempted or blamed unfairly.
4. “We passed our audit, so we must be doing everything right.”
The truth: A clean audit doesn’t necessarily mean your internal controls are flawless. Audits are designed to assess overall financial accuracy—not to identify every process gap or potential risk. That’s why it’s important to evaluate your controls regularly, even if your audit results are strong.
5. “We use software—that takes care of controls.”
The truth: Technology can help, but only if it’s configured correctly and monitored regularly. Without defined approval roles, access controls, and review processes, automation can actually introduce new vulnerabilities.
6. “We’ve never had a problem before.”
The truth: No news is not always good news. Many internal control failures go undetected until there’s a crisis. Waiting until something goes wrong is the most expensive way to fix a problem.
7. “Controls are too expensive or time-consuming to implement.”
The truth: The most effective controls are often simple: documented procedures, review checklists, dual approvals, limited access, and timely reconciliations. Compared to the cost of fraud, penalties, or poor financial decisions, controls are a smart investment.
8. “We don’t need formal policies—we’re a tight-knit team.”
The truth: In the early stages, informal processes and verbal instructions might have been enough to get by—but they rarely keep up with growth. As your team expands, documenting workflows and responsibilities becomes essential for maintaining consistency, reducing errors, and bringing new employees up to speed efficiently.
9. “We’re too small to segregate duties.”
The truth: Small teams aren’t off the hook—there are still ways to build in accountability. Simple steps like manager approvals, rotating duties, or occasional spot checks can go a long way. It’s not about perfection; it’s about creating visibility and reducing risk.
10. “Internal controls are just for finance.”
The truth: While financial reporting is a major focus, internal controls also support compliance, operations, IT security, and HR processes. If it involves decision-making, money, or data—it needs oversight.
Final Thoughts: Controls Are a Growth Strategy
Strong internal controls aren’t just about reducing risk—they’re about enabling smarter, faster decision-making. They create confidence in your numbers, improve accountability across departments, and prepare your business for scaling.
Not sure where to start? Whether you need a light-touch review or help redesigning your processes, our team can help you implement right-sized controls that support your business goals. Contact us today!
