The importance of a control system within the business.
Internal controls are methods or procedures adopted in a business to:
-Assist in achieving the businesses' objectives
- Ensure financial information is correct and reliable
- Ensure cooperation with all operational and financial requirements
- Protect its Assets
They are essentially checks and balances within a business. It's objective is to reduce errors, limit financial losses and prevent fraud. They also segregate duties within the company and limit one persons control over an entire area. For example-
never have one person writing, receiving and reconciling your business accounts.
As the owner of Millennium Land Developers, it is your responsibility to ensure that the business has a good internal control system. As they flow through the entire business to:
- Help align objectives of the business:
To make sure everything is covered in the reporting procedures and the activities currently undertaken by the business are in line with the objectives of the business.
- Safeguard assets:
Makes sure the physical and monetary assets of the business are safe from theft, errors and fraud.
- Prevent and detect fraud and error:
Enabling the internal control system quickly identifies fraud and errors when they occur.
- Allow action to be taken against undesirable performance:
A method of dealing with dishonesty or fraud if detected
- Reduce exposure to risks:
Minimising the probability of any unexpected events happening
- Ensuring proper financial reporting:
Maintains complete and accurate financial reporting requirements by management and legislation and minimising lost time by fixing mistakes and ensuring resources are efficient and mistake free when allocated
- Completeness:
That all the required information are included in the business reports. These include transactions and records.
- Accuracy:
Making sure that the right amounts are recorded into the correct accounts
- Authorisation:
Makes sure the correct level of authority deals with
-Assist in achieving the businesses' objectives
- Ensure financial information is correct and reliable
- Ensure cooperation with all operational and financial requirements
- Protect its Assets
They are essentially checks and balances within a business. It's objective is to reduce errors, limit financial losses and prevent fraud. They also segregate duties within the company and limit one persons control over an entire area. For example-
never have one person writing, receiving and reconciling your business accounts.
As the owner of Millennium Land Developers, it is your responsibility to ensure that the business has a good internal control system. As they flow through the entire business to:
- Help align objectives of the business:
To make sure everything is covered in the reporting procedures and the activities currently undertaken by the business are in line with the objectives of the business.
- Safeguard assets:
Makes sure the physical and monetary assets of the business are safe from theft, errors and fraud.
- Prevent and detect fraud and error:
Enabling the internal control system quickly identifies fraud and errors when they occur.
- Allow action to be taken against undesirable performance:
A method of dealing with dishonesty or fraud if detected
- Reduce exposure to risks:
Minimising the probability of any unexpected events happening
- Ensuring proper financial reporting:
Maintains complete and accurate financial reporting requirements by management and legislation and minimising lost time by fixing mistakes and ensuring resources are efficient and mistake free when allocated
- Completeness:
That all the required information are included in the business reports. These include transactions and records.
- Accuracy:
Making sure that the right amounts are recorded into the correct accounts
- Authorisation:
Makes sure the correct level of authority deals with