accounting procedure or physical control to safeguard assets against loss due to fraud or other irregularities. Internal check is an element of internal control. Weak internal check mechanisms mandate a greater degree of auditing procedures. An example of internal control is segregating the record keeping for an asset and its physical custody, such as in the case with inventory and cash. No one individual should have complete control over a transaction from beginning to end. Internal checks make it difficult for an employee to steal cash or other assets and concurrently cover up by entering corresponding amounts in the accounts. An example of internal check is the establishment of input and output controls within a data processing department. A group or person has the responsibility of checking control totals provided by the user department with those generated during the processing of the data. Examples of physical controls are guards and gates to restrict access.
company policy to safeguard property from theft and damage; for example, the use of locked fences to secure property kept outdoors.
