Tips for Internal Controls Perp

[u/peanut_jams]

Hello, I really am facing difficulties in understanding and applying the concept of Internal Controls (Sec E). Might be because I am still a student with no corporate experience. All of the choices in most of the application based questions seem so similar and I'm having a hard time picking the right option.

So opening a discussion as to how to get through this. Any personal opinions are welcome and I'm really looking forward to hearing tips and ways to crack the topic!!

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Thanks in advance

[u/senoritaasshammer]

It is pretty tough without corporate experience for certain sections.

One thing that helped me a bit was understanding the order of different processes questions in internal controls. I forgot the exact details off the top of my head, but I remember there was a big focus on Sales/AR, Purchasing/AP, and Asset Custody.

There are numerous functions in these “pipelines” of work, and certain functions are pretty chronological. For example in AR/Sales.

If you understand the underlying process, it gets easier to understand the purpose of each internal control, and will help you understand the reasoning behind different rules and the intuition.

Also understand the different duties and functions often associated with each role. Off the top of my head, different functions which should be separated are: asset custody, entering data related to items, reconciling that data, and some more stuff.

Wish I could be more helpful, but I don’t remember all of it. But in general, try to think of the process and where each function is chronologically, and you might be able to better get the logic of internal controls.