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Advantages of Internal Check
The main advantages of Internal Check are given below.
1. Proper Distribution of Work: Internal Check helps in proper distribution of work between employees based on their qualification and experience. It enables the employees to perform the work efficiently.
2. Detection and Prevention of Errors and Frauds: The main object of internal check is to minimize the occurrence of errors and frauds, as no individual person does the work from the beginning to the end and the work of one person is checked by another person.
3. Increases Efficiency: A good system of internal check, increases the efficiency of work of employees as the right work is allocated to the right person taking into account his skill and experience.
4. Determination of Employees Liability: Internal check system clearly determines the responsibilities of the employees. Hence, the liability of the employees can be easily fixed due to irregularities or negligence caused by the employee.
5. Proper Maintenance of Books of Accounts: Internal check system helps to maintain proper records and ensures accuracy of the entries in the books of accounts.
6. Easy and Quick Presentation of Final Accounts: Internal check enables quick presentation of final accounts i.e., Profit and Loss Account and Balance Sheet immediately after closing of the accounting period.
7. Facilitates the Auditor: When there is an effective internal check system the statutory auditor can rely on the system. He can avoid detailed checking of transactions. He can select limited sample of transactions. This enables him to finish the audit work within time.
8. Increases Profitability: Overall efficiency and economy of operations leads to increased earnings for the owners of the enterprise.
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