Objectives of Internal control

Statement describing what a student is expected to learn from the lesson. The learning objective provides a detailed description of what the student will be able to do when the instruction ends. A teacher uses a learning directive to help students understand how to make practical use of information learned during the lesson.

1. ASSETS PROTECTION: The purpose of internal control is to protect assets of business entity. The assets are used in the business. These assets are in the custody of responsible officers. So assets are not destroyed or misused.

2. ACCURATE RECORD: The purpose of internal control is to maintain accurate accounting record. The business transactions are processed under generally accepted accounting principles after authorisation of competent person.

3. FOLLOW POLICIES: The purpose of internal control is to follow policies of management. The policies are broad guidelines for obtaining business objectives. All employees try their best to follow rules of the game.

4. PREVENTION OF ERRORS: The purpose of internal control is to prevent errors. There may be unintentional mistake due to overwork or carelessness. There is normal workload with every person. The senior person checks the work of junior person.

5. PREVENTION OF FRAUDS: The purpose of internal control is to prevent frauds. It is intentional misrepresentation of financial information by one or more individuals among management, employees or third parties.

6. BEST USE OF RESOURCES: The purpose of internal control is the best use of resources. There is a need of optimum combination of resources for maximising profits. Internal control can point out weakness that can be removed.

7. NATURE OF TEST AUDIT: The purpose of internal control is to determine the nature and extent of audit test. When there is effective internal control there will be few audit tests otherwise there will be a need of thorough checking.

8. RELIABLE RECORD: The purpose of internal control is to maintain reliable accounting record. The equal distribution of work among the employees provides complete and reliable record, as it is free from errors and frauds.

9.  REDUCE WORKLOAD: The purpose of internal control is reduction of workload. The effective internal control can be useful for auditors. They can check few items remaining items will be treated as checked by the auditor.

10.LOCATION OF ERRORS AND FRAUDS: The purpose of internal control lo locate frauds and errors. There are many types of errors and frauds t-lal may be found in the accounting record. The compliance and substantkie tests may be applied to detect the frauds.

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