What must the organizational structure provide according to internal controls?

The organizational structure must provide clear lines of authority and responsibility because this is fundamental for effective internal controls. When roles and responsibilities are well-defined, it ensures that individuals understand their specific duties and the limits of their authority. This clarity helps prevent confusion and overlapping responsibilities, which can lead to errors or misuse of resources.

In a structured organization, accountability is established as each member knows who is responsible for what. This facilitates proper oversight and helps in maintaining integrity within the organization. Moreover, it plays a critical role in risk management, as it allows for easier identification of potential weaknesses within the control systems.

Establishing clear lines of authority also ensures compliance with regulations and ethical standards, as individuals know their obligations and the extent of their decision-making power. Overall, a well-defined organizational structure supports a robust internal control environment, which is essential for achieving operational efficiency and effectiveness.