Internal control, so far as financial and accounting aspects are concerned, aims at:
- Providing the flow of work through various stages.
- Breaking the chain of the work in a manner so that no single person can handle a transaction from the beginning to the end.
- Segregation of accounting and custodial functions.
- Securing proper documentation at each stage.
- Specifying authority to enter into the various transactions and for every action connected therewith.
- Recording the transactions in the books of account correctly.
- Safeguarding of assets.
- Making errors and frauds difficult.
- Fixing responsibility for the work and the responsibility for deviations.
- Building up a system to locate the deviations and departures from the prescribed procedures and to detect frauds and errors automatically without much loss of time.
- Elimination of conflicting responsibilities.
- Evolving standardised records.
- Providing account charts and the accounting manual.
- Preparation of periodical accounting and financial report.
- Making the work simpler as far as practicable.
- Minimising loss and wastage.
- Encouraging employees to do willing and good work.
- Discouraging employees from non-compliance with the prescribed procedures.
- Appraisal of the operations.
- Employment of persons of quality.
- Formulating a cut-off procedure to separate transactions of two consecutive years.
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