What is in accounting?
Internal control is a system of rules and procedures that the organization provides to ensure the reliability of its financial reporting, efficiency and efficiency of its operations and compliance with valid rules, regulations and laws. Internal inspections are designed and implemented not only by the director of the organization, but also by its leadership and managers. Although they are designed to meet a number of goals, internal inspections are primarily focused on the financial activities of the organization. A properly designed internal control system in the organization's operations can prevent poor management and incorrectness, including embezzlement, fraud and theft. The fewer people are aware of this, the more likely the probability of success. The more people who are aware of, the greater the likelihood of failure or deterrence. For example, it can be relatively easy to write fraudulent checks for accounting, if only one signature is required, but if two are required, theft is much more difficult.
Thus, one of the simplest methods of internal control is the segregation of the duties of individuals involved in financial activities. For example, most organizations require two signatures in inspections or inspections that exceed a certain amount, ensuring that checks cannot be simply written by one person at will. If the checks are printed by a machine or computer, they should not sign (or apply mechanical signatures) & Emdash for printing; This work should be assigned to another person. If the checks are registered in the payment of goods, the internal control systems should require that the documentation of the consignment confirmation is associated with the invoice before registering the check -up. This simple rule ensures that a person responsible for making a payment may be reasonably sure that the goods have been actually received in good condition, even if the receiving space is far from the financial office. If the check must be signed by someone else, it will beaccompanied by all documentation that will be reviewed before signing and transferring to the seller.
unpopular part of many internal control systems is a ban on personal relations, including marriage, among employees in financial services and other departments. If there is a personal relationship between someone in the accounts due department and someone in the warehouse, it is expected to resign and find employment elsewhere to avert the appearance of inappropriateness.
Companies of publicly held and many large private companies have internal inspections requiring regular audits to the external Accompasses of the company, as well as the internal audit department, authorized by regular reviews of financial transactions and other operations. Properly performed, these third parties and internal audits will thoroughly explore the company and analyze its procedures in terms of internal control and examine transactions to ensure that they are represented.
Internal control systems, although they are commonly understood as financial POPAhu is not limited to financial activities, but are expanding to other areas of the company's operations to ensure that they actually take place as expected. The “quality control” and “quality control” department are mechanisms of operational proceedings that work to ensure that everything is represented from the marking to safety seals to the ingredients. Inventory control mechanisms help protect society from the loss due to the housing, and safety staff not only maintains unauthorized staff outside the device, but discourage the case.Inposters and procedures of control and procedures of preservation in 2002 have gained more importance in the United States with the enactment of the Sarbanes-Oxley Act called "Reform of Accountants and Protection of Investors of Public Society". Received in response to a number of corporate and accounting scandals and placed a much greater degree of responsibility on managers of publicly held companies. For example, managers of the company routinely signthe annual reports of their companies; Sarbanes-oxley holds them personally responsible for their material inaccuracies. Thus, these executives have a special motivation to implement thorough internal control systems to ensure the reliability of their messages.