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Principles of Internal control

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Identify 6 principles of internal control.
Give examples for each principle that might be observed when picking up pizza.

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Solution Summary

The answer contains the meaning, definition and six basic principles of internal control

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Meaning of Internal control:

An accounting procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error etc.

Definition of internal control:

Entire financial and other controls covering the organization, method, process and internal audit established by the administration in order to ensure that the activities
are carried out in an effective, economic and efficient manner in compliance with the purposes of the administration and determined policies and the legislation, the assets and resources are protected, accounting records are kept in an accurate and complete manner and financial and management information is produced in time and in a reliable manner.

Basic principles of internal control

1. Internal control activities shall be carried out within the framework of managerial responsibility of the administration. Internal control contains two dimensions: accounting control and administrative control. Accounting control relates to the accuracy of the accounting records to safeguard the assets and to prevent frauds. Administrative control relates to checking of records which are concerned with the decision process leading to management authorization of transactions. ...

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