Question

Respond to the following in a minimum of 175 words:

• Discuss the meaning of internal control in the context of accounting. Then, share five examples of internal control procedures designed to prevent fraud and accidental accounting errors

Answer 1

An internal control is a procedure or policy put in place by management to safeguard assets, promote accountability, increase efficiency, and stop fraudulent behavior. In other words, an internal control is a process put in place to prevent employees from stealing assets or committing fraud.

Internal Controls acts as a check on the employees & also tries to mitigate the risk in the operations of the business.

Examples of Internal Control Procedures to preveny fraud & errors are :

• Separation of duties
• Pre-approval of actions and transactions
• Access controls
• Physical control over assets
• periodic reconciliations
• standardized documentation
• physical audits