What are management\'s incentives for establishing and maintaining strong internal control? What are the auditor\'s main concerns with internal control?

Strong internal controls ensure that assets and records are properly safeguarded. Management also needs a control system that generates reliable information for decision making. If the information system does not generate reliable information, management may be unable to make informed decisions about issues such as product pricing, cost of production, and profit information.
The auditor uses the understanding of the entities internal control to identify the types of potential misstatements, ascertain factors that affect the risk of material misstatement, and design tests of controls and substantive procedures. The auditors understanding of internal control is a major factor in determining the overall audit strategy.