Objectives of Internal Control in Detail

Objects of Internal Control in Detail

1. Assets Protection
The assets are the backbone of any business. These assets are in the custody of some specific officers of the business. The internal control system checks the valuation and protect the assets of the business.

2. Accurate Record
The main object of the internal control is to maintain all records and transactions of the business according to the generally accepted accounting principal.

3. Follow Policies
The purpose of internal control is follow policies of management. The policies are guidelines for obtaining the business objectives. All employees try their best to follow the rules of the game.

4. Prevention of Error
The purpose of internal control is to prevent errors. There may be unintentional mistake due to overwork or carelessness. There is normal load work with every person. Others check the work of one person.

5. Prevention of Frauds
The purpose of internal control is to prevent fraud. It is an intentional misrepresentation of financial information by one or more individuals among management, employees or their parties.

6. Best Use of Resources
The purpose of internal control is the best use of resources. There is a need of optimum combination of resources for maximizing profits. Internal control can point out weakness, which can be removed.

7. Nature of Audit Test
The purpose of internal control is to determine nature and extent of audit test. When there is effective internal control there will be few audit test other wise there is need of through checking.

8. Reliable Record
The purpose of audit is to maintain reliable accounting record. The equal distribution of work among the employees provides complete and reliable record, as it is free from error and fraud.

9. Reduces Work Load
The purpose of internal control is the reduction of workload. The effective internal control can be useful for auditors. They can check few items and remaining items will be treated as checking by the auditor.

10. Location of Errors
The purpose of internal control is the location of errors. There are many types of error, which may be found in the accounting record. The internal control procedures are useful to locate the error in accounting.

11. Detection of Fraud
Detection of fraud is the purpose of internal control. The compliance procedure and substantive procedures can be applied to detect the fraud. Basically it is a management responsibility.

12. Record of Business
Internal control system is also required for the maintainers of the reliable accounting record. Due to the internal control the records are without the errors and frauds.

13. Record of Expenditures
Same way the internal control system keeps the records of all the expenditure of the business and there are fewer chances of errors and frauds.

14. Recording of Transaction
Due to the internal control system all the transactions are recorded properly in the correct account in the proper period.

15. Actual Comparison
The assets and the other records, which are recorded, can be easily compared with the actual existed information.

16. Preparation of Statement
Another object of the internal control is to ensure about the preparation of the financial statement at the proper time as the balance sheet or profit and loss.

17. Management Objectives
The objectives of the system of internal control are to ensure the achieving of the other important management control.