Principles of an internal audit control system
Write down the essential principles of an internal audit control system?
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The essential principles of financial internal control are elucidated below: Financial and accounting operations should be separated that is the managing of cash and the recording of the movement thereof must be done by various persons. Responsibility for the performance of the job should be clearly stated so that there might be no room for doubt or perplexity subsequently.
Too much confidence must not be pinned in one individual. Almost all frauds have been committed by trusted employees or officials. It is interesting to note that frauds have happened owing to their being trusted. Relation principle riveting to transfer of an employee from one job to any other job must be the inflexible guiding rule. This is an effectual safeguard against complicity and is recognized as a significant standard of sound organization. Automation of the work wherever practicable and feasible must be resorted to, mechanical devices like cash register, recording time clocks, computation machines must be introduced. A system of control accounts must elegantly be fitted in the book keeping system. The work must be so assembled that work done by one employee must be appropriately checked by independent employee. Such constant and continuous checking goods moral control and the mistakes and the frauds can’t go undetected.
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