Internal control is a whole system of controls financial and otherwise, established by the management for the smooth running of business; it includes internal cheek, internal audit and other forms of controls. According to sap-6 entitled, “Study and evolution of the accounting system and related internal control may be defined as “ the plan of [...]

Division of work – a work job should be divided into small parts and every part of the job should be allotted to a different worker. No one person should be allowed to handle a complete job. Work rotation – The job among the clerks should be rotated over a period of time so that [...]

Following are the main points of difference between internal audit and statutory audit: 1. Appointment – The management of the organization makes the appointment of an internal auditor. The statutory auditor is appointed by different authorities. First statutory auditors are appointed by the shareholders in the annual general meeting. 2. Qualification – Qualifications of the [...]

Internal check system is such a system in which duties of different assistants are divided and allocated to each other in such a way that their work is supplementary and dependent upon each other. By this system the work is automatically checked as it is done. Since one particular job is not assigned to any [...]

Internal Control – Internal control system is best regarded as the whole system of controls financial and otherwise made by the management in the conduct of a business entity which include internal check system, internal audit and other forms of controls. The management lays down internal control. This system contains plan methods and procedures of [...]

The relationship of the internal auditor and statutory auditor can be summed up as follows: – 1. As per manufacturing and other companies order 1988 issued under section 227 of the companies’ act the statutory auditor has to comment upon the effectiveness and suitability of internal audit system laid down be the management. 2. To [...]

Internal audit is an important part of the internal control system. Guidelines issued by the institute of chartered accountants of India on internal auditing define it as “an independent appraisal involving specialized application of the techniques of auditing in accordance with the specific need of the enterprise.” The institute of internal auditor USA defines internal [...]

Internal audit system is a critical evaluation of the functioning of various departments of enterprise. Internal audit implies an audit of books of account by the employees of the organization itself. Internal audit is done by separate department known as internal audit department. Its staff may or may not have required professional qualifications. An internal [...]