According to Spicer and Peglar “Internal control is best regarded as the whole system of controls, financial and otherwise, established by the management in the conduct of a business including internal check, internal audit and other forms of control”.
As per the above definition we can say that :-
- The internal control is a system of controls.
- Controls are established over financial and non-financial areas.
- The method of control may be in the form of internal check or internal audit or other forms.
Advantages of Internal Control
- It does the efficient conduct of its business.
- It is useful for safeguard of business.
- It prevents and detects the fraud and error.
- It provides accuracy and completeness of the accounting records.
- Reliable financial information are prepared timely.
Disadvantages of Internal Control
- More money is spent to keep the internal control staff as well as the auditors.
- Internal control is not beneficial in case of small business firms.
- The dispute always remains between the regular accounts staff and the internal control staff.
- The morale of accounts staff also affects.
- If the internal control staff is lazy then there is no use of internal control.
- There may be confusion in views of internal control staff and the statutory auditors or internal auditors.
- Internal control system is wastage of time.
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