Internal Control– Meaning, Goals, Scope, Limitations. As per SA-315, the internal control might be specified as “The procedure developed, implemented and kept by those charged with governance, management and other personnel to offer sensible guarantee about the achievement of an entity’s goals. Now you can scroll down below and check more information from listed below …
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Material in this Article.
The strategy of company and all the techniques and treatments embraced by the management of an entity to help in accomplishing the management’s objective of making sure, as far as practicable, the orderly and effective conduct of its company, consisting of adherence to management policies, the protecting of possessions, avoidance and detection of fraud and error, the accuracy and completeness of the accounting records and the preparation of reputable financial information.
Objectives of Internal control
Scope of Internal control
It extends beyond accounting controls. Basically internal controls can be classified into two broad classifications:
( i) Accounting controls
( ii) Administrative controls
Accounting manages primarily focus on provision and timely preparation of trusted financial details by strictly following the procedures and broad policies envisaged by the management. Whereas administrative controls consist of all other supervisory controls worried about the decision making procedure. e.g. Preparation and upkeep of authorized/ registered Vendors’ register.
Limitations of Internal control
The inherent restrictions of Internal Control are–
|Expense||Management’s factor to consider that a control be cost-efficient.|
|Mistake|| The capacity for human error.