"Internal check refers to allocation of duties in a scientific way so that no one is responsible for all phases of the transactions." Explain the essential features of Internal check in the light of above statement.

The term 'internal check' refers to allocation of duties in such a manner that the work of one person is checked by another while that other is performing his own duties in a normal way. Internal check is the organisation of duties of staff in a scientific way so that no one is responsible for all phases of the transaction and the work of one employee is so distributed that the discrepancies are revealed in the process of performance of duties of that employee. The duties are divided and sub-divided in such a manner that discrepancies flow out from the system itself. Essential features of internal check are given hereunder: There should be proper division of work and responsibilities. The duties of each person should be properly defined so as to fix definite responsibilities of each individual. Possibilities of giving absolute control to anybody should not be left out unchecked. Too much confidence on a person should be avoided. The duties of staff should be rotated and one person should not be allowed to occupy a particular area of operation for long. Necessary safeguards should be provided so as to avoid collusion of thoughts which quite often leads to commission of fraud. The person handling cash, stock, securities should be given compulsory leave so as to prevent their having uninterrupted control. Physical inventory of fixed assets and stocks should be taken periodically. Assets should be protected from unauthorised use. To prevent loss or misappropriation of cash, mechanical devices such as the automatic cash register, should be employed. The financial and administrative powers should be distributed very judiciously among different officers and the manner in which these are actually exercised should be reviewed periodically. Accounting procedures should be laid down for periodical verification and testing of different sections of accounting records to ensure that they are accurate