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The Use of Internal Controls in Accounting

There are, however, global procedures that are applicable to internal controls in all types of asset protection environments. These global procedures are as follows (Needles, Powers, Mills, and Anderson 288):

Segregation of Incompatible Functions

Authorization controls refer to procedures designed to limit the ability of individuals to either acquire or dispose of assets solely on their own initiative. Any procedure that requires the collusion of two or more individuals to accomplish an illegal act tends to inhibit illegal activity or at least make the detection of such acts more likely.

Feedback controls, such as transaction recording and verification, cause actions to be more transparent than would be the case in the absence of such procedures. Transparency inhibits illegal activity. As an example, the Code of Practice covering internal controls at ENI Corp. states that:

It is ENI's policy to disseminate, at every level of its organization, a culture characterized by an awareness of the existence of controls and a control oriented mentality. A positive attitude towards control is to be achieved in order to increase it


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