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Internal controls are measured by a business to guard against waste, error and fraud and to ensure the reliability of accounting data. Most of the internal control procedures in a professional practice are put into place to protect the owner from fraud by employees, although every business owner should check for wasted time and effort.
1. Divide up duties. The employee who has access to an asset should not have access to the accounting records of that asset. If two or more employees are in collaboration, fraud may still occur, but separation of duties among employees decreases the chances of dishonesty.
For example, the person who writes the checks or makes the deposits should not be the same person who does the bank reconciliation. An employee should not be permitted to handle all aspects of the transaction.