What Are The Purposes Of Internal Control?

Purposes of internal control are many. These are given below;

Internal Control protects the company's Assets.
It ensures if the records are accurate.
It promotes operational efficiency
It also encourages adherence to policies.

Generally, there are three types of Control:
1. Preventative
2. Detective
3. Corrective

Preventative Controls
Prevention Controls are designed to discourage errors and irregularities from occurring. E.g. Processing travel vouchers only after signatures are obtained from appropriate personnel.

Detective Controls
Detective Controls are designed to search errors or irregularities if they have occurred. E.g. For inappropriate charges, reviewing of the departmental monthly account reports are prepared.

Corrective Controls
These types of controls are designed to fix errors or irregularities when they are detected. E.g. Transfer Expenditures Request form is completed, approved properly, and sent to Finance for moving an expense to the proper account.

Who is responsible for it?
Everyone i.e. auditors, plays an important role in internal control system. Ultimately, it is the responsibility of ASU management to ensure that controls are in right place. That responsibility is handed over to each area of operation. Every employee has his own responsibility for making this internal control system functional. Therefore, all ASU employees require to be aware of the concept and purpose of internal controls. Internal Auditing helps you in achieving that goal.

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