The internal controls can be broadly classified into following four main categories:

(i) Administrative control – Administrative controls include all types of managerial controls related to the decision making process. An example of administrative controls is the maintenance of records giving details of customers contacted by the salesmen.

(ii) Operational control – This is exercised through “management accounting” techniques viz. budgetary control, standard costing etc.

(iii) Financial and Accounting control – This control refers primarily the management plans, objectives and procedures that are concerned with the safeguarding of assets, prevention and detection of fraud and error, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

(iv) Compliance control – These controls aim at ensuring compliance with applicable laws and regulations. These Controls also help to ensure compliance with laws regarding the system and intellectual property.

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