How are internal controls influenced according to the provided content?

Internal controls are significantly influenced by the people who implement and monitor them. This refers to the understanding, commitment, and competency of staff and management in adhering to policies and procedures designed to achieve effective internal controls. Human judgment plays a crucial role in addressing risks, maintaining compliance, and ensuring accountability.

The effectiveness of internal controls is often contingent upon the ethical standards, training, and behavior of the individuals involved in the processes. For example, employees who are well-trained and understand their role in the internal control system are more likely to act in accordance with established protocols, thereby enhancing the overall integrity and effectiveness of those controls.

While policies and procedures are important in defining how internal controls should function, it is the individuals applying these controls who determine their success or failure. Relying solely on technology or software is insufficient, as even the best systems can fail if not properly managed or if staff are not adequately trained to utilize them. Therefore, the human factor is essential in fostering a robust internal control environment that adapts to changing circumstances and continuously mitigates risks.