1. Internal control
“According to The American Institute of Certified” Public Accountants Internal control comprises of the plan of the organisation and all the co-ordinate methods and measures adopted within a business to safeguard its assets, check the accuracy and reliability of its accounting data to promote operational efficiency and to encourage adherence to prescribed managerial policies”
It includes both financial and non financial control.

2. Purpose of internal control
To client
Providing reliable data.
Safeguarding assets and records
To promote operational efficiency
To encourage adherence to prescribed policies

3. Characteristics/elements or principles of internal control
Competent and trustworthy personnel
Records, financial and other organisational plans
Segregation of duties
Supervision
Authorisation
Sound practices
Internal Audit
Arithmetic and Accounting Control

4. Limitations of internal Control
Involves expenditure of time and money
Irregular transactions may be overlooked
Human error may weaken internal control
Person exercising control can abuse his authority
Manipulation by management
Changes in conditions may render the procedure ineffective

5. Areas/Scope of internal control
General financial control
Cash control
Control over trading transactions
Control over employees remuneration
Capital expenditure control
others

6. Internal control and Auditor

7. Internal control questionniare

8. Internal check
Ronald A Irish “Internal check refers to the organisation of office duties in such a way as to prevent or disclose both errors and frauds.” Spicer and Peglar “Internal check is an arrangement of staff duties whereby no one person is allowed to carry through and record every aspect of transactions so that without collusion between two or more persons, fraud is prevented and at the same time the possibilities of error are reduced to the minimum.”

9. Principles or characteristics of a good system of internal check
Responsibility
Completion
Rotation of employees
Automatic check
Reliance
Safeguards
Supervision
Formal sanction
Periodical review

10. Advantages of internal control
Proper division of work
Detection of errors and frauds
Increased efficiency coupled with economy
Moral check
Convenience to auditor
Increase in profit
Quick preparation of final accounts

11. Disadvantages of internal check
Costly for small business
Quality is sacrificed for promptness
Carelessness among high officials
Disorder in the working of a business
Risky for an auditor

12. Internal check and auditor
Internal check with regard to cash receipts Internal check with regards to cash sales Sales at counter Sales by travelling salesmen Postal sales Cash receipts Petty cash payments

13. Internal check with regard to
Wages
Purchases
Sales
Stock

14. Internal Audit
Watter B. Meigs “Internal auditing consists of continuous critical review of financial and operating activities by a staff of auditors functioning as full time salaried employees. The Institute of internal Auditors, USA, “internal auditing is an independent appraisal function established within an organisation to examine and evaluate its activities as a service to the organisation. It is a type of control which functions by measuring and evaluating the effectiveness of other types of control, it deals primarily with accounting and financial matters, but it may also properly deal with matters of an operating nature. “

15. Internal check vs. Internal audit