ACCT2200 Internal Controls

Establishment of responsibility

control is most effective when only one person is responsible for a given task

Segregation of duties

the work of one employee should provide a reliable basis for evaluating the work of another employee

Documentation procedures

documents should provide evidence that transactions and events have occurred

Physical, mechanical, and electronic controls

relate primarily to the safeguarding of assets and enhancing accuracy and reliability of the accounting records

Independent internal verification

the review, comparison, and reconciliation of information from two sources

Other controls

bonding of employees who handle cash, rotating employee’s duties, and requiring employees to take vacations

Internal controls

policies and procedures designed to provide reasonable assurance that a business will safeguard its assets and record its transactions properly in order to eliminate any material discrepancies