54 Internal Control
Meaning and Definition
Internal control is a broad term with a wide coverage. It covers the control of whole management system. Internal control involves a number of checks and controls exercised in a business to ensure its efficient and economic working.
According to The American Institute of Certified Public Accountants, “Internal control comprises of the plan of organization and all the coordinate methods and measures adopted within a business to safeguard its assets, check the accuracy and reliability of its accounting data to promote operational efficiency and to encourage adherence to prescribed managerial policies.”
The system of internal control can be defined as, “the plan of organization and all the methods and procedures adopted by the management of an entity to assist in achieving the management’s objectives of ensuring, as far as practicable, the orderly and efficient conduct of its business.”
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