What is the Difference Between Internal Check and Internal Control?
🆚 Go to Comparative Table 🆚The main difference between internal check and internal control lies in their purpose, scope, and implementation within an organization. Here are the key differences:
- Purpose: Internal checks are designed to prevent errors and irregularities, safeguard assets, ensure accuracy and reliability of financial and operational information, and promote adherence to established policies and procedures. On the other hand, internal control is a broader concept that involves the policies, procedures, and processes implemented to ensure an organization meets its objectives, operates efficiently, and maintains compliance with laws and regulations.
- Scope: Internal checks focus on the segregation and delegation of tasks to subordinates for the smooth running of a business. Internal control, however, encompasses a wide range of procedures, policies, and measures aimed at achieving an organization's objectives and mitigating risks that can prevent the organization from meeting those objectives.
- Implementation: Internal checks are usually implemented by operational management functions, while internal control is the responsibility of the entire organization, including the board of directors, audit committee, and operational management. Internal audits, which evaluate the effectiveness of internal controls, may report directly to the board or the audit committee to maintain independence and objectivity.
- Frequency: Internal checks are ongoing activities that are part of an organization's day-to-day operations. In contrast, internal audits are conducted at specific times to assess the effectiveness of internal controls and provide independent, objective assurance.
In summary, internal checks are a part of an organization's internal control system, focusing on the day-to-day operations and tasks. Internal control, on the other hand, is a broader concept that encompasses all the policies, procedures, and processes aimed at achieving an organization's objectives and mitigating risks.
On this pageWhat is the Difference Between Internal Check and Internal Control? Comparative Table: Internal Check vs Internal Control
Comparative Table: Internal Check vs Internal Control
The difference between internal check and internal control can be summarized as follows:
| Internal Check | Internal Control |
|---|---|
| Internal check refers to the segregation and delegation of tasks to subordinates for the smooth running of a business. | Internal control is a broader concept, encompassing rules, policies, and procedures adopted to ensure the correctness of finance and accounting, protection of business assets, accountability, and preventing errors, risks, frauds, and other irregularities. |
| Focuses on the arrangement of work and allocation of responsibilities. | Focuses on preventing, identifying, or correcting loopholes in financial reports and ensuring the efficiency and productivity of the organization. |
| Involves checking accounting and clerical accuracy to prevent errors and fraud. | Implemented to ensure that an organization meets its objectives and that risks are mitigated. |
| Internal checks are carried out on a day-to-day basis and at all organizational levels, such as tactical and operational levels. | Internal controls are designed and documented at the corporate management level. |
| Internal checks only deal with the stage-wise functions of separate seniors who look after those. | Controls are checked and verified by everyone with equal responsibility, directly impacting the efficiency and productivity of the organizations. |
In summary, internal check is a specific procedure involving the simultaneous cross-checking of ongoing work, while internal control is a broader concept that includes internal checks and other measures to ensure the organization meets its objectives and mitigates risks.
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