Internal check system is useful to number of parties which are as follows:
1. Advantages To An Auditor
If internal check system is effective, an auditor can apply test check rather than checking the books of accounts in details. So, auditor can save his time and labor which simultaneously saves the cost.
2. Advantages To Businessman
Following advantages can be achieved by the businessperson from internal check system:
* Internal check detects errors and frauds which increase the morale of honest staffs. It helps to increase the production and reduce the cost. So, it helps to increase sales and profitability.
* Staffs know the real position of the business. So, it helps to maintain good relation between staffs and managers.
* Internal check system assures the owners in the accuracy and reliability of books of accounts.
3. Advantages To Business
Internal check system is beneficial to the business also. So, the advantages which can be achieved by the business are as follows:
* Right, responsibility and duties of staffs are clearly defined under the internal check system. So, they perform work whole heartedly which reduces the chances of errors and frauds and increases profit.
* Internal check system is based on the principle of division of labor. So, the work of business can be completed easily at minimum cost.
* Work of every staff is checked automatically. So, the staffs remain honest which increases the profitability of business.
* Every book of accounts remains correct, so final account can be prepared in less time, cost and labor.
