Name:Farhana Riaz

Roll no:MBKE-18-02

MBA (B/F) eve 4th

Chapter #9

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Internal Control
“Internal Control refer to the whole working system of company or
organization about their financial records check that the company working
going to company polices and assets are safe and also reliability of records.”
In this chapter we talk about the techniques or tools helps in internal control. These tools are following

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Basic Control
Supervisory control
Internal check
Internal Audit

Figure: Internal Control Techniques

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1. Basic Control
It refers to check that all transactions done in company are valid. There are some common
techniques are following
(a) To check the Procedure that follow by the company.
(b) Pre-numbering of necessary document (invoice, financial doc and other doc) help to check
document easily.
(c) Review of Accounts on regular basis.
(d) Regular verification of actual existence of Asset.
2. Supervisory Control
Control by a responsible officer who check that all working according to company’s policy.
(a) Dual Verification help to make control level more effective ( Approval and authorization).
(b) Reconciliation Statement means to double check of whole statement and compare (own
prepared statement b/w actual statements).
(c) Regular Check by own staff member or responsible officer that all working follow company
policies.
3. Internal Check
It refers to the segregation (Separation) of duties or task of employee.
(a) Division of task to different sector or individual due to this working divide into different
hands and one person is not responsible for whole working.
(b) Segregation of duties that each section is responsible for its own duty.
(c) Staff rotation refers to the changing of staff duties on the basis of their skills after specific
time period.
4. Internal Audit
Audit refers to the check and balance of whole working of the company that they follow the
company polices or set standard of company or not.
Audit done my internal Auditor (Company own Auditor) and External Auditor (Send by Govt).
 Duties of Internal Auditor
The Duties of internal Auditor are following
 Regular Check of all Accounting and financial records
 Check all truncation done in Organization and about its supervision and
authorization.
 Tell about the error and weakness on company in our audit reposts.
 Advantage of audit
 Company knows about their weak ends.
 Most of decision is based on audit report.
 Due to Audit Company make sure that all working done under their policies.
 Difference between Internal and external Auditor
 External auditor is more independent then internal.
 Internal auditor is show more interest in audit as compare to external due to part of
company management.
 Internal auditor may be Bise with any employee but Bisness chance of external
auditor is weak.
Whistle Blowing