Internal Controls: Ways To Minimise Risk

Question 1

Implement Physical Controls

Answer 1

Restricting access to parts of the building, or fixing down assets to stop theft or removal of these assets.

Question 2

Implementing authorisation and approval processes

Answer 2

Ensuring two managers approve cash withdrawals, or purchase limits.

Question 3

Ensuring that duties are segregated

Answer 3

For example, the person who is
responsible to giving out petty cash, usually is not the same person who
counts and checks the cash tin at the end of the month (to eliminate the risk of fraud and identify errors).

Question 4

Reduce the risks of arithmetic and accounting calculation mistake

Answer 4

Implementation of controls to ensure accurate recording and processing of
transactions, for example; procedures such as reconciliations and trial
balances.

Question 5

Human Resource Controls

Answer 5

Controls can be put into place to verify someone’s qualifications, references or criminal record to ensure they have the skill necessary to complete the role etc.