The process of setting goals in the day-to-day operations of an organization, examining actual performance, detecting discrepancies, and taking corrective action is called internal control system.
Internal control is the mechanism for preventing and dealing with mistakes and fraud. This is also called the process by which the upper body knows whether the work done by the lower body is correct or not.
Internal control system type
The internal control system to be used as per the requirement has been classified into three types accordingly.
2 Current condition control
3 Answer control
Elements of the internal control system
The following elements are included in the internal control system.
1 Internal audit
2 Internal investigation
Internal audit is the process of conducting independent investigations by the staff within the organization to correct mistakes and shortcomings. These audits are carried out at different times within the financial year according to the principles of regular frugality, efficiency and effectiveness. Strong internal audit report management is presented to strengthen the internal control system.
The process by which another employee automatically observes the work done by one employee is called internal investigation. This is considered a form of division of labor. The practice of looking at work from the same level, upper level or lower level i.e. 360-degree vision is called internal investigation.
What should be done to manage the internal control system?
In order to reduce the risk in banks and financial institutions, the following policy, institutional and practical arrangements have been made.
- Staff regulations·
- Credit investment policy·
- Security policy·
- Deposit collection policy·
- Asset Liability Management Policy·
- Audit guidance·
- Relevant circulars and other rules etc.
A structural arrangement or institutional arrangement·
- Audit Committee·
- Risk Management Committee·
- Security Committee·
- Credit Investment Committee·
- Department of Internal Audit·
- Other relevant groups
- CC camera to be connected·
- Insurance will be arranged·
- The concept of checker and maker will be implemented·
- When ratings continue·
- To be transferred in a timely manner·
- Managers and treasurers should not live in the same house·
- There will be an arrangement of right-hand locks·
- Strict adherence to compliance·
- Security arrangements to protect the goods and property of the organization
Thus, the bank, which accepts public deposits guarantee, has made adequate control measures to strengthen internal discipline.