Bhalotia Classes (9883034569): 5Sem Audit (Hons &Pass) (2022-23)_
56. Distinguish between internal control system & internal
check system. [Important]*******
The following are the differences between Internal check & Internal Control system:
S.No Basis Internal Check
Meaning A system of allocation of
responsibility, division of work.
and methods of recording
transactions, whereby the work
of an employee is checked
continuously by another.
Scope It operates in routine to double
check every part of a transaction
at the time of occurrence and
recording of the same.
Its objective is to ensure that
Objective
no one employee has exclusive
control over any transaction or
group of transactions and their
recordingin the books.
Point of Time Methods of recording
transactions are devised where
work of an employee is checked
continuously by correlating it
with the work of others.
Thrust of The thrust of internal check
system 1s to prevent errors.
System
Cost Involved I t is a part ofinternal control
and a method of division of
work, therefore does not add to
the cost.
Report The summary of day to cay
transactions work as report to
the senior.
48-Admission going on throughouttheyear for B.com all semesters. Call
Internal Control
It consists of all the methods
and procedures adopted to assist
of
in achieving the objective
business.
efficient conduct of
check and
It includes internal
internal audit.
In internal control systems,
work of one person is
automatically checked by
another.
Its object is to ensure
adherence to management
policies, safeguarding of assets,
prevention and detection of
frauds and errors, accuracy and
completeness of accounting
records.
In internal control system,
checking is done simultaneously
with the conduct of work. Every
transaction is checked as soon
as it is entered.
The thrust of internal control
lies in fixing of responsibility
and division of work to avoid
duplication.
The system proves to be costly
in case of small businesses
because more number of
employees are engaged.
Internal control provide for
built in MIS reports.
 BASIS FOR INTERNAL AUDIT
INTERNAL CHECK
COMPARISON

Internal Check is a system, wherein Internal Audit is the

Meaning ongoing critical examination
division of work and allocation of
responsibilities are organized in of the financial and
operational activities
of the
such a manner that the work of one

concern, by an
internal
employee is spontaneously looked
auditor.
over by another.

Work performed by the

Method Work of one person is automatically
checked by another person. employees is examined by a

separate group.

Commences from the moment a Once the transaction has

Commencement
beer: recorded in the books.
of Work transaction is entered.

Accounting and clerical accuracy Effectiveness of

Involved
management control
evaluation of

A spacially dedicated team

Performed by Existing staff
of auditors

CostInvolvement Economical Comparatively Expensive

Prevention of errors and frauds Detection of errors and

Thrust of System
frauds

Arrangement of the work Examination of the work

Tool for

Time of Checking Checking is performed Examination of the work

simultaneously when the work is takes place after the work is
performed. completed.

Summary of day to day transactions Submits his/her report to

Report
acts as a report to the supervisor. the management.

- 49- Admission going on through0ut the year for B.com all semesters. Call