Concept of Internal Check
An internal check is a part of internal control. It is concerned with staff duties so that a single person is not allowed to record every aspect of a transaction. Internal check is the process of arrangement of duties of various staffs of a business in such way that work is automatically checked by the next staff while performing their duties. It is an arrangement of duties of the staff members in such a way that the work performed by one person is automatically and independently checked by the other. Frauds which are committed by a staff are automatically detected and corrected by the another staff.
Ronald A. Irish says that It refers to the organization of office duties in such a way as to prevent or disclose both errors and frauds.
L.R. Dickness says that It is an arrangement of book that error and frauds are likely to be prevented by the operation of the bookkeeping itself.
It is an arrangement of duties of members of staff in such a manner than the work performed by one person is automatically and independently checked by the others. It is a built-in-device to facilitate the work of business concern. So, it helps a lot in the work of final audit. For example, staff records the expenditure in a book and another staff posts them into a ledger, another staff checks and verifies the ledger and payment are made by another staff. The senior employee has powers to check the work of others. There is a need for complete harmony among the employees for doing their duties. So, the work of one staff is checked by other staff while performing their works so that errors and frauds committed by one staff are detected and prevented by another staff. In small business concern, it has no popularity due to less number of employees.
The essential elements of an internal check are :
(a) Instituting of checks on day-to-day transactions.
(b) These checks operate continuously as a part of a routine system.
(c) Work of each person is made complementary to the work of another.
