BTN 8-8 HITTING THE ROAD

Internal control is an action plan that includes policies, procedures and method that are created and used by the business to monitor and control business activities. Internal controls do not provide guarantees, but they lower the company’s risk of loss. An effective internal control helps a department to protect assets, ensure reliable accounting, promote efficient operations and urge adherence to company policies.

Binary Cafe also access internal control to minimize the risk of fraud and theft. One of the principles of internal control that used by the company is establish responsibilities. Proper internal control means that responsibility for a task is clearly established and assigned to one person. When a problem occurs in a company where responsibility is not identified, determining, who is fault is difficult. For example, in this cafeteria, they have around 2 to 3 cashiers because they have a shift. Cashier will collect and calculate the profit for the whole day and will give to the clerk. The cashier can be more than 1 person because they have not enough staffs or workers to handle all the jobs. Most of us have waited at a retail counter during a shift change while employees swap cash drawers.

Separate record keeping from custody of assets. Person who control or access to an asset must not keep assets accounting records. This principle reduces the risk of theft or waste of an asset because the person with control over it knows that another person keeps its records. Also, a record keeper who does not have access to the asset has no reason to falsify records. This means that to steal an asset and hide the theft from the records, two or more people must collude or agree in secret to commit the fraud.

Based on interview, it is not the same person who handles the control of asset and accounting records in