Saturday, August 4, 2012

What are Internal Controls Uses in Internal Auditing

To ensure timely preparation of financial statements in accordance with general accepted accounting principles and company law. Sound system of internal control reinforces external Auditor belief on true and fair view of the financial statements. It lowers the cost of audit, as auditor will perform less substantive tests, if he/she considers internal controls are strong enough to prevent, detect and correct errors and omissions accidently or due to fraud. Internal controls also ensure that reliable and complete information is available for management accounting purpose to assist decision makers. However, internal control does not ensure that information being reported is relevant to the needs to decision maker. Internal controls safeguards assets of the business. To prevent and detect fraud that can impede achievement of business objectives.