ACCOUNTING AND FINANCIAL CONTROL

Internal control, so far as financial and accounting aspects are concerned, aims at:

1.  Providing the flow of work through various stages.
2. Breaking the chain of the work in a manner so that no single person can handle a transaction from the beginning to the end.
3. Segregation of accounting and custodial functions.
4.  Securing proper documentation at each stage.
5.  Specifying authority to enter into the various transactions and for every action connected therewith.
6.  Recording the transactions in the books of account correctly.
7.  Safeguarding of assets.
8. Making errors and frauds difficult.
9.  Fixing responsibility for the work and the responsibility for deviations.
10.  Building up a system to locate the deviations and departures from the prescribed procedures and to detect frauds and errors automatically without much loss of time.
11.  Elimination of conflicting responsibilities.
12.  Evolving standardised records.
13.  Providing account charts and the accounting manual.
14.  Preparation of periodical accounting and financial report.
15.  Making the work simpler as far as practicable.
16.  Minimising loss and wastage.
17.  Encouraging employees to do willing and good work.
18.  Discouraging employees from non-compliance with the prescribed procedures.
19.  Appraisal of the operations.
20.  Employment of persons of quality.
21.  Formulating a cut-off procedure to separate transactions of two consecutive years.