Application of internal controls in small business Essay Example

Done Jones, a small business entrepreneur, should implement internal controls including a recording system for expenditures and payroll, task delegation system, and an authorization system. Operating a small business involves various expenses such as purchasing raw materials and tools, as well as managing operational costs. Done Jones has a limited workforce of up to ten employees, making it essential to delegate tasks in order to effectively manage workload.

As such, the purchase-order system is a suitable specific type of internal control that Done Jones can implement. Personnel who need cash disbursement complete a purchase-order form that includes details of the expenses, signatures, and later receipts. Once authorized by Done Jones, the form is forwarded to the finance officer for filing and fulfillment. By documenting all expenses through the purchase-order form (Hupalo, 1999), the company has records of its financial transactio