A Keynote On The Internal Control Practice Of Business Organisations
A huge organization is a place where complex business dealings and transactions are carried out continuously throughout the year. Therefore, a system of internal control is absolutely necessary for an effective business administration. Moreover, the QProfit System control is a widely accepted tool for optimum utilisation of the resources and also, it creates an opportunity for boosting the profits.
Almost all the functions of a company are conducted either with the help of human resources or equipment and so, there is an immense need to properly supervise these sectors for avoiding loss created by faults and other ineffective operations.
A comparison between small and large firm
The strategy of internal control implicated in the huge enterprise is completely different from that of a small enterprise.
- In the case of the small trader, he knows the details of his stock, its purchasing area, cash deposits or so and he merely needs one or two assistants for making speedy delivery possible. Here the control or power lies in the hands of the owner and there is no essential need to assign or part the duties.
- As the business flourish, things become bulky and the owner definitely needs help to carry out the venture. To adjust to the changing requirement, he further should keep or allocate employees with a specific task for running the company in a systematic manner.
There are situations when the owner has to entirely rely on these business officials for their job, for the assets delegated to them. Apart from this, he has to make sure if all the company machinery or instruments are properly kept or not. Here comes the need to establish as an organization, where duties are divided among the managers and the staff members along with executing the business goals with regard to a pre-planned strategy.
To proceed efficiently, there must be an underlying control or regulation practiced on its employees so as to keep them in the main operation track. Then only, the business processes become systematic, reliable and productive.
Implementing the Internal control system
- The primary step towards developing the internal control system involves the control procedures laid down by the management. This should be following the business liabilities; the board and employees support and so on.
- Further, the auditor analyses its scope of efficacy and nature during stressed conditions. For this, he may conduct an examination of the records and a trial control to see if things are reliable and the company assets are safe.