An internal control is a business practice, policy or procedure that is established within an organization to create value or minimize risk. It is broadly defined as a process effected by an entity's board of trustees, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:
• Effectiveness and efficiency of operations
• Reliability of financial reporting
• Compliance with applicable laws and regulations
• Safeguarding of assets
Principles and procedures of internal control clarify their purpose in the following areas:
· Establishing written control procedures and employment responsibilities to include selection and training of employees.
· Maintaining adequate records and separating record keeping.
· Asset control, limiting access to assets, conducting surprise checks, and dividing the responsibility for related transactions.
· Rotating jobs, using machines for control, establishing standards, evaluations, bonding employees, and required vacations.
· Using external audits, providing audit trails, numbering all control documents, and a continuous system review.
· Control of product inventory.
· Specific controls required for cash receipts and cash disbursements.
· Setting and evaluating performance standards with actual results.

Problems Unique to the Hospitality Industry
Business Size
Almost every hospitality operation can be described as a small business and small businesses are usually harder to have a comprehensive control than large businesses.
Cash Transactions
A great deal of cash accumulates in departments each day, making it easier to be miscounted or stolen. Further, many hospitality operations have some departments working around the clock, making it harder to count and control.
Inventory Products
Inventory products are valuable to dishonest