Internal controls are mechanisms,rules,and proceedures implemented by a company to ensure the integrity of financial and accounting information,promote accountability and prevent fraud

Internal controls are comprised of activities that are specific policies and procedures management uses to achieve its objectives

Internal Controls and Recommendations to improve the monitoring of controls

Seggregation of duties : requires different individuals be assigned responsibility for different elements or related activities particulary those who are handling authourization,custody or book keeping. Ideally, the process of cash receipts and payments will be seperated, with segregation of duties with different people approving invoices, preparing checks,signing checks,and reconciling the bank accounts. Allowing the one individual to handle cash or checks received,deposits,and the posting of payments in the system increases the risk of fruad. These process should be segregated among different individuals.

Restrict Access to Financial Statements :  The most common accounting software used by businesses give its users the ability to edit and delete previous transactions which could lead to easy concealment of theft. Business owner shoukd retain ADMIN rights if possible to company's accounting sysytem and consider restricting user access to only areas necessary for their functions.This will help reduce the chances of individual creating false entries and coverinng up there tracks.

Increase Oversight : Internal controls without oversight is not good enough. You, or a trusted resource, should deligently review bank statements, check or payment registers and bank reconciliations regulary. Review payroll statements for Phantom employees and unapproved raises, hours or even expenses, Impress upon the employee they need to keep supporting documents and you should periodically review some transactions and supporting documents for validity and accuracy.

Have Financial Statements Reviewed By a Third party: To support bookkeeper and other in-house accounting efforts, business owner should consider utilizing their CPA to periodically review the finacial statements. An individual who knows that the work performed will be subsequently reviewed will be more likely to be deterred for commiting fraud. An outside accountant can be instrumental in identifying inaccuracies and inconsistencies in the financial records as well as helping business owners better understand the procedures of their financial data.

Require Employees To Take Vacation: Embezzlement and other types of fraud require a constant paper trail cover-up in order to go undetected in accounting records. Therefore, business owners should insist that employees who performing accounting/bookkeeping take a vacation every year and designate a backup person to cover their responsibilities during that leave.Ideally the vacation should be a week long and occur over a month-end when the books are closing