The allocation of responsibilities is also critical. Staff appointments for each activity, and the hierarchy attached to them, must be clearly communicated. This will ensure that all transactions are authorised in advance by the designated officials.
This position is based on the conviction that corporations are not independent entities whose sole responsibility is to the shareholders. Enabling the use of clearer and more audited current asset information for the purpose of making timely decisions.
Information systems that generate reports containing operational, financial and compliance data that enable the management and control of the business.
Such reports include not only internally generated data, but also information on incidents, activities, external conditions, necessary for decision making and financial reporting.
Hence, internal control facilitates receiving, using and controlling cash from sales made by the entity without affecting the financial statement.