Question

Describe internal controls, why we have them and give an example of three internal control procedures.

Answer 1

internal control:-internal control are the rules,regulations,procedures etc framed by a company to ensure the integrity of financial and accounting data,to promote accountability and to prevent fraud.it also helps to improve the quality and timeliness of accounting information.

the need of internal control:-it helps to employees and other who are in position of management to understand the character and objective of the businessa as a whole.eg:-customer always interested to choose the organization which have a good internal control as a whole.

examples for internal controls:-

audit:-by auditing the accounts of an organization by an independent auditor,it helps the owners to provide the best and sincere financial report to the people concerned and to detect any fraud or error happened from the staff.

bank reconciliation:-always do reconciliation of bank statement provided by bank with bank statement which is maintained in company's record and fnd any discrepency among the data.

aproval authority requirements:-always authorize the paymnets by an authorized person,then they have an idea about financial position and can prevent fraud.