Summary Accounting - Internal controls

INTERNAL CONTROLS:


TYPES OF CONTROLS:

PREVENTATIVE DETECTIVE
 Controls that deter or prevent an  Controls that assist in identifying
undesirable event from taking an undesirable event after it had
place occurred.
 E.g. security guard, burglar alarm  Fire alarm, security videos

CORRECTIVE ACCOUNTING
 Controls that discourage an  Controls that maintain a reliable
undesirable event from taking method of processing and
place. communicating financial
 No smoking signs information




MINIMIZING RISKS IN A BUSINESS:

RISK WAYS TO MINIMIZE WHO IS ACCOUNTABLE
 Regular checks on electrical  Maintenance personnel
1. Fire installments  Owner is ultimately
 Install fire alarms and hydrants responsible for everything
 Insurance to reduce financial effect
 Security guards  Security personnel
2. Theft  Alarm systems  Owner is ultimately
 Create awareness of potential responsible for everything
problems
 Good internal controls  Accountant
3. Fraud  One person checks on the next  Internal auditor
 Division of duties  Owner is ultimately
responsible
 Good safety measures  Supervisors
4. Injury  Insurance  Managers
 Owner is ultimately
responsible
5. Economic  Good financial planning  Senior management
downturn  Having financial reserves  Owner
6. Natural  Secure structures  Senior management
disaster  Emergency safety drills  Owner