Summary
Summary Accounting - Internal controls
- Course
- Accounting
- Institution
- 11
3 page detailed summary of internal controls of a business
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INTERNAL CONTROLS:TYPES OF CONTROLS:
PREVENTATIVE DETECTIVE
Controls that deter or prevent an Controls that assist in identifying
undesirable event from taking an undesirable event after it had
place occurred.
E.g. security guard, burglar alarm Fire alarm, security videos
CORRECTIVE ACCOUNTING
Controls that discourage an Controls that maintain a reliable
undesirable event from taking method of processing and
place. communicating financial
No smoking signs information
MINIMIZING RISKS IN A BUSINESS:
RISK WAYS TO MINIMIZE WHO IS ACCOUNTABLE
Regular checks on electrical Maintenance personnel
1. Fire installments Owner is ultimately
Install fire alarms and hydrants responsible for everything
Insurance to reduce financial effect
Security guards Security personnel
2. Theft Alarm systems Owner is ultimately
Create awareness of potential responsible for everything
problems
Good internal controls Accountant
3. Fraud One person checks on the next Internal auditor
Division of duties Owner is ultimately
responsible
Good safety measures Supervisors
4. Injury Insurance Managers
Owner is ultimately
responsible
5. Economic Good financial planning Senior management
downturn Having financial reserves Owner
6. Natural Secure structures Senior management
disaster Emergency safety drills Owner
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