Question

Internal controls are critical especially for protecting cash which is very portable.

What is internal control? What are the objectives of internal control?

Answer 1

Answer:

Internal Control:-

Internal controls are the approaches and strategies that a business establishes so as to secure its assets, guarantee its accounting information is correct, boost the proficiency of its activity and promote an atmosphere of consistence among the workers

Internal control as defined by accounting and auditing , is a procedure for assuring of an association's objective's in operational viability and effectiveness, solid financial related announcing and consistence with laws, guidelines and policies.

It is implies by which an company resources are coordinated, checked and estimated.

There are main 3 types of internal controls:

• Detective ,
• Preventive and
• Remedial control

. Internal controls are critical especially for protecting cash which is entirely compact or very portable. Inward control contain appropriate physical controls additionally like security guard . It additionally contain secret phrase or password in locker and appropriate isolation of duties.

Objectives of Internal Control:-

i) Operations :-

Refers to the adequacy and productivity of the associations operations,including activities and financial performance objectives and safeguarding resources against loss.

ii) Reporting:-

Relates to internal and external financial related and non-financial reporting and may incorporate reliability, courses of events and extra terms as set out by controllers, perceived standard setters , or the entity policies.

iii) Compliance:-

Relates to adherence to laws and methodology to which the substance or entity is subject.