What Is Internal Control

Every transcription has a need to control its intellectual picture to risk that can be due to exit in internal security, acts of nature or accidents. These elements if non cautiously p eachiate can be a source of Brobdingnagian going away and even bankruptcy for an organization. Controls atomic number 18 directives and restraining influences all over the activities of a system, method of invoice system systems assist caution in controlling operations because accounting internal controls run into that all transactions atomic number 18 authorized, all transactions are recorded, access to assets is allowed wholly for authorized purposes and accounting records describe only real assets. (Shsu, 2008) Internal Control was rootage defined in 1949 and deals with both accounting controls and administrative controls. A key authorisation in establishing internal control is logical argument on Auditing Standards No. 48. This statement distinguishes between Admini strative controls: includes, barely is not limited to, the device of organization and the procedures and records that are touch with the end processes leading to managements authorization of transactions and Accounting controls: which comprises the plan of organization and the procedures and records that are concerned with the safeguarding of assets and reliability of financial records and thus are designed to provide reasonable assurance that: a. legal exercise are executed in accordance with managements general or specific authorization. b. Transactions are recorded as necessitate 1.to permit preparation of financial statements in conformity with mainly accepted accounting principles or either other criteria relevant to such statements and 2.To maintain accountability for assets. c. Access to assets is permitted only in accordance with managements authorization. d. The recorded accountability for assets is compared with the existing asset at reasonable int ervals and appropriate action is taken with ! respect to any(prenominal) differences. (Shsu, 2008). What is...If you want to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper