Internal Control Manual Procedures


An internal control is a group of directives a company's senior leadership implements to prevent operating losses, such as litigation and fines. Operating losses may result from technological breakdowns, employee carelessness, fraud and error. Internal control manual procedures help employees conform to corporate policies and regulatory guidelines to minimize the company's risk.


  • Approvals ensure that employees who make decisions have proper authorization. A typical approvals policy indicates corporate tasks and the corresponding hierarchical levels. For example, you may implement an approvals policy in your company's treasury department and request that two senior employees sign all checks exceeding $5,000. You also may instruct the bank not to honor any check exceeding $10,000 if it does not bear your signature.


  • Verification procedures help you make sure the work of staff conforms to corporate policies, human resources guidelines, government regulations and industry practices. For example, a senior accountant should verify the work of bookkeepers by reviewing journal entries to assure debits and credits are correct.

Review of Operating Performance

  • To gauge the company's profit potential and economic robustness, you occasionally need to review operating performance indicators. These indicators provide insight into the firm's financial condition, profitability, cash flows and equity capital.

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