Difference between internal control and internal check

Difference between internal control and internal check

The main difference between internal control and internal check is, internal control is a procedure or method which is implemented by the management to control the business activities whereas internal check is a process in which one person checks the work accuracy of another person. Means internal control is done to make a limitation in business activities which has done by the employer of the company.

And this implementation or limitation is done by the management of that particular company. While in internal check a person who is working with the company will check the work accuracy of that person who is working in the same company. To understand the detailed difference between internal control and internal check at first you have to know more about internal check and internal control. So let’s discuss internal control in detail.

What is internal control?

Internal control is a method or procedure which is implemented by the management of the company to control the business activities which is having in the company. In simple words, it is a limitation in business activities for the employer who are working in that particular company.

This limitation is done by the management for a particular reason and this limitation is done by the management of the company. The management implements internal control to prevent fraud and errors.

It is also used to prevent employees from stealing assets. It means internal control aims to prevent the company from errors and frauds which occurs as in documentation, authorisation and so on. And as it controls the companies from errors and frauds as well as prevent employees from stealing assets, so it improves the overall efficiency of operation.

As this is an operation done to prevent fraud, so it improves the overall efficiency of these operational activities. This internal control is further divided into two types.

Types of internal control

  1. Preventive control activities
  2. Detective control activities  
1. Preventive control activities

                 Preventive control activities are done to detect the errors and implement them. If management found any faults then this process of internal control is used. It deters the error and makes it correct. The main aim of preventive control activities is to control undesirable activities or undesirable events which are happening. To control all these things preventive control activities are used. These frauds and errors occur in the form of documentation, authorisation and many more. If these things won’t stop then all these will cause a big problem for the company.

So the company uses preventive control activities to make their company free from all this unwanted stuff. In case if they found any doubt regarding any fraud or error then they use preventive control activities to deter that errors and implement that. Nowadays most of the company using this preventive control activity for their company to keep their company free from all these undesirable activities.

So this was a short brief about preventive control activities which every company using nowadays for improving their overall operational efficiency. If we take one example to understand preventive control activities then, let the management of the company doubt that there is fraud occurring in his company and he want to know that fraud and implement that. Then he will use this preventive control activity to deter that errors or fraud and then after clearing his doubt the management will correct that error or fraud.

2. Detective control activities

Detective control activities are a backup process that is used to catch the event or item which has been missed by the preventive control activities or even called the first line of defence. In case while doing the process to deter errors or fraud and at that time if preventive control activities missed some of the events then this detective control activities catch that event or item and it sent back to the preventive control activities to recheck and correct the errors.

It means the main aim of detective control activities is to catch the error or faults which missed by the preventive control activities. It is the backbone of preventive control activities as if any part of events rest to examine and sent to the final then, in that case, it catches that error and sent that back to deter the error and frauds.

If we take one example to understand detective control activities more easily then, let the management of the company check fraud or error by using preventive control activities and the time when they are checking some of the parts remained unchecked. In that case, these detective control activities will catch that error and will send a signal and then preventive control activities will recheck the error and frauds and will correct that.

These are the two types of internal control activities which is to examine the frauds and errors that occur by documentation or authorisation.

Also, Read

Features of internal control

     The main feature of internal control is to deter errors and frauds occurring in the company. After determining errors and frauds it also prevents employees of the country from stealing assets and prevent frauds.

What is the internal check?

An internal check is a process in which one person checks the work accuracy of another person. This means a person who is working in the company will check the work of the employees who are working in the same company.
This checking is done to reduce the possibilities of error. And as it reduces the possibilities of the error to a minimum so it has very effective while getting to know if there is any fraud occurring in the company. In the case of internal checks, no one is allowed to become after financial transactions because it is in the division of duties. As transactions occur daily while purchasing or selling goods, so it is a continuous process. There are some of the characteristics of an internal check.

Characteristics of internal check

  1. Division of work

As above discussed that in the process of the internal check there is a division of work in which one person check the work of another person. And it is continuously going where work of one person come to another one and going regularly. It means it is a division of work.

2. Use of machine

Nowadays it is the modern age or we call it a machine age. There is a lot of machine use to internal check as some of them are record machine, wage determination machine, etc. These are the machines which are used nowadays for the internal check.

3. Self- balancing system

When work is done and check by multiple people then the balancing of the system increases and as it is done by the person to be divided works, so it is a self-balancing system which gives internal check more efficiency.

4. Job rotation

As above discussed that the work of one person checks another one and this process continuously going. It means the rotation of jobs occur while an internal check has in progress. This helps to reduce the possibilities of error while the financial transactions because there have two persons who conduct the work and the final will have more effective.

These are some of the features of an internal check which differ it from others and makes it more effective to reduce the possibilities of errors and frauds. And there are some of the devices use to internal check.

Features of internal check

  • It minimises the possibilities of error
  • As it is not done by a single person so it prevents from misappropriation of cash and goods.
  • Accurate records of all financial transactions have been shown because of the involvement of two persons to perform and check.
  • And when it is done by performing and check as from job rotation then it has become very easy to prepare the final account efficiently.

Comparison

  • Internal control uses to control the business activities while internal checks use to check the work accuracy.
  • The scope of internal control is broader as compared to the scope of internal check.
  • As it is an arrangement of controlling the business activities so it contains huge cost while internal check contains no cost.
  • The main responsibility of internal control is to fix the unwanted stuff while the main responsibility of internal check is to prevent it from frauds.

These are the main difference between internal control and internal check.

 

Leave a Comment

Your email address will not be published. Required fields are marked *

Call Now Button
Shopping Cart