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How does internal control system help prevent and detect fraud and error?

      

How does internal control system help prevent and detect fraud and error?

  

Answers


Wilfred
•• Supervision. This serves to prevent fraud or error by boosting the awareness of senior employees who will refrain from committing fraud and error by virtue of constant review of operations.
•• Physical controls. These limit access to the assets of the company thus preventing them from damage, misuse or theft.
•• Segregation of duties. This boosts automatic checks, accountability and supervision at all stages of processing transactions, minimizing chances of error and fraud.
•• Arithmetic and accounting controls. Proper recording of transactions according to the principles of ISAs will prevent errors and frauds such an manipulation of accounts.
•• Personnel. Engaging qualified, competent and efficient personnel will reduce chances of errors. The company’s staff should be motivated and properly remunerated to prevent temptations of fraud.
•• Routine and automatic checks. These minimize fraud by boosting awareness that work will be continuously checked, accountability will be increased and importance of being honest will be emphasized.
Wilfykil answered the question on April 11, 2019 at 12:45


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