Question

what is an internal control that you have seen in use? Do you think it is effective? Why or why not?

Answer 1

An effective internal control that i have seen is discussed below. The better the internal control, better will be the functioning of a company. There are some points which relate to a proper and best internal control:-

1. DELEGATED AUTHORITY

The Board of Trustees delegates authority through the Chief Executive for the everyday running of the association. In a huge and occupied association it isn't commonsense to anticipate that one individual should settle on all the choices and approve all exchanges. The Chief Executive will, further delegate power to members from the staff group to alleviate the load and to guarantee smooth activity during unlucky deficiencies of key staff.

2.AUTHORISATION RULES:-

Nobody ought to approve any transaction from which they will get personal benefit. This exposes the person to claims of inappropriateness and raises doubt about the trustworthiness of the association.

Sub-ordinates must not approve payments to supervisors – they should be passed to somebody who is increasingly senior in the administration structure.

3.BANK RECONCILIATION

The closing balance on the Bank book ought to be reconciled to the closing balance on the bank statement at every month end. This ground-breaking control empowers the association to recognize exclusions and blunders in its own records, just as being the best way to spot check fraud, bank mistakes and even bank misrepresentation.

A bank reconciliation statement should be set up for each financial balance each month, at that point reviewd by and marked by another capable individual, for example, the administrator or Treasurer.