Control is a basic human requirement and it has existed throughout the ages in different facets of human activity. Business as such is a complex process and has grown even more complex with the technological advancement of the society. The formalisation of the concept of internal control in the sphere of business administration is a comparatively recent phenomenon. In the sphere of a business, control is an accepted device for optimum utilisation of the resources and opportunities for maximisation of profits. All operations of a business are carried on with the help of human agents and equipment; both these factors need supervision so that the tasks assigned to them are properly carried out and avoidable wastes and losses do not occur to eat up the fruit of the enterprise. The internal control required by a sole proprietor of small business is not identical with that required for a large industrial organisation. A small trader having a grocery shop hardly needs more than one or two assistants. He decides the work to be done by the assistants. He always knows his own stock, cash and bank position. He has the knowledge of daily sales. He himself knows the sources for purchases. He arranges transport and makes the purchases. He keeps the record of the debtors and creditors. The assistants merely help him in delivering goods to customers or to arrange the goods in proper order. From the above, it can be observed that control is entirely centralised with the owner and there is no significant delegation of duties. However, as the business grows in size it soon reaches a stage where the owner can no longer keep himself intimately informed about the detailed operations of his business, activities of the employees and the discharge of their responsibilities. To cope with the increasing size and volume of business, he has to employ more and more people and for systematically carrying on the business, he has to specify the tasks for each person. For remote operations he has also to rely upon these people, for carrying out the work, for the custody of the materials, documents and equipments entrusted to them. He has also to ensure that the equipment and facilities are properly maintained. For this purpose, he has to give shape to a form of organisation from which he would be in a position to know the broad details of the work involved and the persons responsible for such work. Also, he has to work out a plan of delegation of duties and authority for the simple reason that, for anything and everything, people need not come to him for advice or decision, because, under such circumstances, he would not be able to find time to apply his mind to matters of more importance.
Human behaviour is such that if it is not under some sort of regulation or control, it often tends to depart from the proper path. It needs to be kept under systematic watch not only for ensuring that the employee does his work, but also to see that he does it in the manner laid down for the purpose and handles the material and equipment with proper care.

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