WHAT INTERNAL CONTROL CAN DO AND CAN NOT DO FOR YOUR BUSINESS

style="display:block"
data-ad-client="ca-pub-9014703631517284"
data-ad-slot="7212404593"
data-ad-format="auto"
data-full-width-responsive="true">

 WHAT INTERNAL CONTROL CAN DO AND CAN NOT DO FOR YOUR BUSINESS WHAT INTERNAL CONTROL CAN DO AND CAN NOT DO FOR YOUR BUSINESS

Internal control is broadly defined as a process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

1. Effectiveness and efficiency of operations.
2. Reliability of financial reporting.
3. Compliance with applicable laws and regulations.

It can also be defined as a process for assuring achievement of an organization’s objectives in operational effectiveness and efficiency manner.

Internal control is not a god and should not be relied on totally. Below are some what can do and what can not do of internal control.

What internal control can do

1. It can help a business acheive it performance and profitability target.

READ ON Similarities and Differences between Book Keeping and Accounting Powered by Inline Related Posts

2. It can help reduce waste of resources

3. It can ensure reliable financial report

4. It can help avoid damage of a business reputation and

5. It ensures compliance with laws and regulations.

What internal control can not do

1. It can not change an inherently poor manager to a good one.

2. It can not avoid actions of competitions

3. It can not stop change in government policies

4. It can be circumvert by collution of two or more staff

5. Management can overide the internal control system.