Internal Controls Are A Serial Of Control Activities Essay
To my understanding, internal controls are a serial of control activities. They should include at least following specific control activities: adequate separation of duties, proper authorization of transactions or activities, adequate documents and records, physical control over assets and records independent checks on performance.
First of all, Separation of duties is achieved by disseminating the tasks and associated privileges for a specific security process among multiple people.
Secondly, proper authorization of transactions or activities is also important concept in accounting. That means individuals cannot authorize transactions for their own business reimbursement, such as travel reimbursements and expense reimbursements.
Thirdly, recording issue refers to adequate documents and records, a process of creating and maintaining those financial records. For examples: preparing journal entries, entering requisitions, inputting time, correcting payroll charges, and entering Vouchers, etc.
Fourthly, set up a physical control over assets. Others may name it custody of assets. For instance,…