The Costs and Benefits of Internal Control

The Costs and Benefits of Internal Control

Internal Control

Internal control refers to procedures that protect the resources of an organization by documenting and then reporting on financial matters (e.g., financial statements, income tax return, and audit). (Brody, 2008)This approach reduces the probability of a recording error, fraud, or embezzlement. Internal control involves following generally accepted accounting principles (GAAP) promulgated by the American Institute of Certified Public Accountants (AICPA) and Financial Accounting Standards Board (FASB). One dimension of internal control is documentation. Whenever a financial transaction occurs, it is documented; for example, a record of a check, ...