RAS Mains Revision notes/ quick bytes Paper I, Part C: Accounting and Auditing: Internal Control

Revision notes/ quick bytes

Paper I, Part C: Accounting and Auditing: Internal Control

 

Internal Control:

Internal control comprises of the plan of the organisation and all the coordinate methods and measures adopted within a business to safeguard its measures adopted within a business to safeguard its assets, check the accuracy and reliability of its accounting data to promote operational efficiency and to encourage adherence to prescribed managerial policies.

 

Characteristics of Internal control:

CROSS-ASIA ( Mnemonics)

C  —–   Competent and trustworthy personnel

R   —–  Records, Financial and other organisation Plan

O —— Organisational Plans

S —– Segregation of duties

S —— Supervision

A —– Authorisation

S—- Sound Practice

I—- Internal Audit

A—- Arithmetic and Accounting Controls

 

Scope of Internal Control:

  1. Safeguard misappropriation
  2. Control over sale and purchase
  3. Financial control
  4. Deciding Employees’ remuneration
  5. Deciding capital expenditure and to keep a eye on it.
  6. To control inventory
  7. To control investment.

 

Objectives of internal control:

  • Safeguard its assets
  • Check the reliability of its accounting data
  • To promote operational efficiency
  • To encourage adherence to prescribed managerial policies.

 

 

Expected questions:

  1. What is Internal control?( 2 marker/5 marker)
  2. Scope of Internal Control.
  3. Features of Internal control
  4. Objectives of Internal control.

 

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