Advantages of Internal control to the Business and
Internal control is like a brain in the human body. Internal check and internal audit are equal to six sense organs of human anatomy. Internal control like brain Issued plans, programs, procedures to be adhered in achieving organizational goals, internal check and internal audit like six sense organs ensure that all departments in the organization functions for the success and wisdom in the life of organization.
The internal control is especially beneficial to business and to all stakeholders in general.
Merits of Internal Control to Business
1. Quality Decisions: Internal control provides ready and
reliable accurate authentic accounting and administrative information for
taking quality decisions on policy matters. Reliable information is base for
quality decisions, and quality decisions decide the fate of organizational
success.
2. Implementation: It ensures the effective implementation
of all policies and procedures effectively in organizational performance as
decided by management.
3. Promote and protects propriety: Internal control promotes
efficiency at all levels of operations, protects assets and prevents the misuse
of business resources.
4. Promotes creative skill: It promotes creative skill of
young an enthusiastic talent, which enhances the operational efficiency.
5. Organizational goals: It helps in achieving
organizational goals.
Merits of
Internal Controls to the Auditor
1. Audit programme: Existence and effective implementation
of internal control enables the auditor to design audit programme serving the
highest order of audit performance.
2. Reliability: The study of internal control guides the
auditors to what extent one can rely on the client’s business records,
information and explanation furnished as audit evidence. Reliability determines
the audit risk. Higher the efficiency of internal control lesser the degree of
audit risks and lesser the degree of efficiency of internal control higher the degrees
of audit risk. Thus, evaluating the system of internal control guide auditor in
deciding to degree of reliability and audit risk factors.
3. Techniques to be employed: High profile of internal
control guide the auditors, what procedures, methods or techniques are to be
employed in expediting the audit work This helps the auditor in optimizing the
time and talent of audit staff to the best satisfaction of client and the audit
profession.
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