Page 100 - CA Final PARAM Digital Book.

Job Rotation- Staff duties should be rotated from time to time so that members do not
perform the same function for a considerable length of time.
Leave-Every member of the staff should be encouraged to go on leave at least once a year.
Segregation of Duties- Persons having physical custody of assets must not be permitted
to have access to the books of accounts.
Accounting Control-There should exist an accounting control in respect of each class of
assets, in addition, there should be periodical inspection so as to establish their physical
condition.
Cash Control- Mechanical devices should be used, where ever practicable to prevent loss
or misappropriation of cash.
(End)
Inventory Control- For inventory taking, at the close of the year, trading activities should,
if possible be suspended, and it should be done by staff belonging to several sections of the
organization.
Record Control-Procedures should be laid down for periodical verification and testing of
different sections of accounting records to ensure that they are accurate

➢ Division of work
Company has not done proper division of work as:
the receipts of cash should not be handled by the official handling sales ledger.
delivery challans should be verified by an authorised official other than the officer handling
despatch of goods.

Case Discussion & Conclusion
➢ In the given case of Modest Hospital, the person-in-charge of inventory inflow and outflow from the
store house is also responsible for purchases and maintaining inventory records. Thus, one of the
basic system of control i.e. internal check which includes segregation of duties or maker and checker
has been violated where transaction processing are allocated to different persons in such a manner
that no one person can carry through the completion of a transaction from start to finish or the work
of one person is made complimentary to the work of another person.
Author’s Note
The above answer can be considered as one of the master answer w.r.t internal control system. Student

are not always required to write the entire answer. They should see what specifically has been asked in
the question before writing the answer

Internal Controls (Multiple Location Old Course – (N11E, M16R, M16M, N16M, PM17, N17M, N18M)
QNO Business)
174.000 New Course – (SM23)
TITANIUM CNO—Unique
Funtoosh Ltd has five entertainment centres to provide recreational facilities for public especially for
children and youngsters at five different locations in the peripheral of 250 kilometres Collections are made
in cash Specify the adequate internal control system towards collection of money.

OR

Y Ltd has five entertainment centres to provide frivolous facilities for public especially for children and
youngsters at 5 different locations in the peripheral of 200 kms Collections are made in cash Specify the

adequate control system towards collection of money.

Answer
➢ Internal Control System:

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