Internal Control System
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The internal control system
Unit 3
Robin Head
AIU ONLINE
When you are talking about accounting there is one than that people in business world fail to mention and that is the limitation of the internal control system. There are at least two limitations they should be address and that is to make sure that you employees take time off from work. If you have employees who are working more than eighty hours a week that can cause human errors.
Human errors are one of the limitations of internal control system. No matter how good your internal control system is the management must have knowledge of how the business is running correctly. If you are having a problem with your internal system you must first identify what is causing the problem and one than could be is the lack of ethics within the organization. The department heads or board of directors should make sure that the people they hire should have to pass some type of ethics code.
When you have a business to run and you put people in charge of making sure that all of the money is being accounted for and you have a journal entry missing and your financial statement and the numbers dont add up that can cause a lot of trouble for that company when it comes to paying their taxes at the end of the year.
If you want to have a effective internal control system you must reduce the chance for errors. Make sure that your operation conditions are in place.
References
www.treasury.qld.gov