Internal Controls

Internal Controls
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Every business needs to have the following examples of internal controls in place. They include the separation of duties. This is where the responsibilities are broken down to different employees in the firm to reduce the chances of fraud occurrence. These duties include the bookkeeping, reporting, and auditing as well as the deposits. The other example is the access control (Ingram, 2018). The controls of the access to different accounting system parts that help reduce the unauthorized individuals from accessing the system. Other internal controls are the standardization of the financial documents used in the business, the physical audits one in the firm, trial balance, approval authority as well as the periodic reconciliation.
Some of the challenges that a business firm faces include the inadequacy of the financial records. When the records are not well written, it becomes difficult to manage the transactions done in the firm. The firm also undergoes a challenge of the lack of proper business policies that indicate how the business processes should run and how the duties should be conducted (“Understanding Internal Controls,” 2018). And also if the control of the authorization of the transaction done in the firm is lacking then the business is likely to suffer since it can’t carry out its activities effectively. The firm may also lack physical as well as logical securities hence increase in the vulnerability o…