Eric Sheldon CPA, PC

Internal Control Advantages and Disadvantages for Business Owners


  • A limited number of employees have access to the control elements within the workflow. For example, in payroll, the person who write the checks are not the same person who signs the checks. When fewer people are involved, it’s easier to monitor actions and guard against irregularities. 
  • Making transactions transparent helps to increase efficiency. 
  • Well-balanced controls protect employees from accusations of irregularities or misappropriations of funds.


  • You cannot guarantee employees will not try to override controls. 
  • Poorly planned or implemented controls creates frustration among employees, who may in turn, bypass the system.
  • Rigid controls may restrict the company’s flexibility to make operational shifts as needed to stay effective.

Control Weaknesses You May Have

Reciprocity outlined four major internal control weaknesses that put your data at risk, including:

  1. Technical control weaknesses focuses on software and hardware.
  2. Operational control weaknesses result people not following policies and standards.
  3. Administrative control weakness are policies and procedures put in place to protect the company’s sensitive information.
  4. Architectural control weaknesses highlights and addresses risks in your company’s IT environment.

If you need help establishing internal controls at your company, give me a call. I’d be happy to help you outline the process, identify tools, and recommend software solutions.

You Might Also Like

Did you like this article?

Get notified when I publish new articles. Just enter your email address below.

About the Author

Eric Sheldon

Eric Sheldon

Eric Sheldon is a certified public accountant with more than 25 years of experience in a wide variety of industries. He's the owner/operator of Eric Sheldon CPA, PC, an accounting firm that specializes in providing tax strategy and preparation, accounting, and bookkeeping services to individuals and small business owners.

More information:

Why and when you want to set up a trust?

A trust can be a useful estate-planning tool for lots of people — not just billionaires. Is a trust right for you? There are two main reasons why you would consider creating one. You have a net worth of at least $100,000, a substantial amount of which is in real estate. You have very specific

Read More »

What Are The Pros and Cons of a Trust

If you’re considering creating a trust, you might want to know more about the pros and cons. A trust can transfer your home title and other property to your beneficiaries without going through probate, which can be expensive, time consuming, and public.   Pros While a living trust may sound like a fancy tool for

Read More »

Top 5 Reasons to Have a Trust Plus The Types

A trust serves a number of purposes in family planning. For example, it can Ensure that assets are professionally managed across generations; Protect beneficiaries from spendthrift tendencies, and minimize income taxes; Serve as an effective vehicle for charitable giving, as it prevents assets from becoming marital assets in the event of divorce; Preserve privacy and

Read More »