Characteristics of Good System of Internal Check
1. Responsibility: Responsibility of each individual must be properly defined and fixed. The work of the business should be allocated amongst various clerks in such a manner that their duties and responsibilities are clearly and judiciously divided.
2. Completion: The work should be divided in such a way that no single person is allowed to complete the work solely by himself from the beginning to the end. However, there should be no duplication of work.
3. Rotation of employees: A good system of internal check should not allow person having custody of assets to have access to the books of account. A system of transfer or rotation of employees from one seat of work to another must be followed by the business.
4. Automatic check: A good system of internal check must provide for an automatic checking of the work of one clerk by the other.
5. Reliance: No clerk of the business should be relied upon too much.
6. Safeguards: Safeguards should be prescribed to keep un-used cheque books, files and securities etc.
7. Supervision: A strict supervision should be exercised to ensure that the prescribed internal checks and procedures are fully operative.
8. Formal sanction: No deviation should be allowed from the established procedures till it is formally sanctioned by the top official.
9. Periodical review: The system of internal check be reviewed from time to time to introduce improvements.
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