'A number of controls falling under operational controls can also be administrative controls.' Explain.

A number of controls falling under operational controls can also be administrative controls. Examples of operational controls are: quality control, works standards, periodic reporting, policy appraisal etc. Administrative controls are very wide in their scope. They include all other managerial controls concerned with decision-making process. They are concerned with the authorisation of transactions and include anything from plan of organisation to procedures, record keeping. distribution of authority and the process of decision-making. They include controls such as time and motion studies, quality control through inspection, performance budgeting, responsibility accounting and performance evaluation etc. Administrative controls have an indirect relationship with financial records and the auditor may evaluate only those administrative controls which have a bearing on the financial records. However, for the purposes of understanding the internal control we may study it in four parts as: 1. Accounting controls. 2. Operational controls. 3. Internal checks. 4. Internal audit. 1. Accounting controls pertain purely to the accounting system which enter finally in the preparation of financial statements and information which are subject to the expression of opinion by the auditors. 2. Operational controls are those which help in improving the efficiency, productivity and not necessarily enter the accounting systems. Works standards, quality control, methods study and motion study, critical path method etc. may be many examples of operational controls. 3. Internal check is a built-in device in the day to day working by separating the duties and functions of the staff in such a way that the work of one is automatically checked by the other e.g. posting of cash transactions in the ledger is done by a person other than who handles the cash and writes the cash book the cashier. 4. Internal audit is an appraisal function to be performed on the principles and practices of audit. The scope of this extends to all the quantifiable information.