INTERNAL CONTROL

INTERNAL CONTROL

1. adopted to

   • safeguard assets
   • ensure accurate, reliable accounting records
   • promote efficiency
   • encourage staff to follow policy

2. effectiveness

   • proper authorisation
   • separation of duties
     • operating - accounting
     • accounting-custody of assets
     • authorisations - custody of related assets
     • within the accounting functions
   • competent, reliable, ethical personnel
   • assignment of responsibilities

3. for e-commerce

   • issues
     • viruses, trojan horses
     • stolen credit cards
     • impersonation
   • protections
     • encryption
     • firewalls

4. limitations

   • collusions
   • cost > expected benefits
   • size of business

5. bank account to control

   • deposit slip
   • signature card
   • cheques
   • bank reconciliation
     • components
       • bank statement
         • bank collections (+)
         • EFT (+)
         • service charges (-)
         • interest earned (+)
       • company's book
         • deposit in transit (+)
         • outstanding cheques (-)
     • reasons
       • time lag
       • errors

6. ethics

   • code of professional conducts
     • professional behaviour
     • professional competence and due care
     • integrity
     • objectivity
     • confidentiality
   • code of ethics