Question

In: Accounting

What is internal control, and what are the objectives of a well-designed internal control structure in...

What is internal control, and what are the objectives of a well-designed internal control structure in an organization?

Expert Solution

DEFINITION OF INTERNAL CONTROL:- Internal control is a process designed ,implemented and maintained by management and those who charged with governanaceto provide reasonable assurance about the achivement of the following objectives by the entity

a)reliability of companies financial reporting

b)Efficiency and Effectiveness of operations

c)Its compliance with applicable laws and regulations; and

d)Safeguarding of assets

OBJECTIVES OF INTERNAL CONTROL;- Internal control relating to financial and accounting aspects are concerned with achiving the following objectivities

a)Transactions are executed in accordance with managements general or specific authorization;

b)All transactions and other events are

- promptly recorded in the correct amount

-in the appropriate account

-in the proper accounting period

-in accordance with the applicable accounting standards,other recognised accounting polices and practices

c)Assets and records are safeguarded from unauthorised access ,use or disposition

d)The recorded assets are compared with the existing assets at reasonable intervals and appropriate actions are taken with regard to any differnce

TYPES OF INTERNAL CONTROL

a)OPERATION CONTROL

b)ADMINISTRATIVR CONTROL

c)ACCOUNTING CONTROL

ekkarill92 answered 2 years ago

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