(3) Internal Audit

In the case of internal audit, the internal auditor who is an employee of the organisation makes an independent appraisal of financial and other operations. In addition, he appraises the company's policies and plans and performance of management. Further, the internal auditor not only pinpoints defects in the management policies or plans but also gives suggestions for eliminating them.

(4) Production Control

Production control which is one of the tools of control in the hands of management involves planning of production, routing, scheduling, stock control and manufacturing control. According to Spreiget, " production control is the process of planning in advance of operations, establishing the exact route of each individual item, part or assembly, setting starting and finishing dates for each important item, assembly and the finished product, and realising the necessary orders as well as initiating the required follow-up to effectuate the smooth functioning of the enterprise". Thus, production control covers every aspect of production so as to effectuate smooth functioning of the enterprise.

(5) Personal Observation

The manager by observing their subordinates while they are engaged in work can exert more fruitful control. By personal observation, the manager will be in a position to know workers attitude towards their work and also correct worker's mistakes, if any. Further, the worker will not be wasting his time as he knows that he is being observed by his superior. Thus, the personal observation is also a valuable tool of control in the hands of managers.

(6) External Audit .Control

External audit is compulsory for all joint-stock companies. External audit ensures that the interests of shareholders and other parties connected with the company are safeguarded against the undesirable practices adopted by the management. The external auditor certifies the annual statements of the company after examining the relevant books of accounts and documents. The external audit is conducted by a qualifies Chartered Accountant.

(7) Standing Orders, Limitations, etc

Management also uses standing orders, limitations etc., as tools of control. The manager who delegates some of his powers to his subordinates lays down the limits for them. In business concerns, standing orders are issued by the management and they are to be observed by the subordinates. Standing orders may relate to rules, discipline, procedure etc. For Example, a standing order may say that no worker should absent himself from work without prior sanctions of leave.

(8) Inventory Control

Inventory control or material management involves the controlling of inventory used by the enterprise. The enterprise might be using the inventory of different kinds and in different quantities. The controlling of inventory involves the maintaining of stock of the right kind of inventory in the right place and in right quantity and quality. It also refers to the controlling of the movement and timings Inventory. The process of inventory control consists of the following elements.

(a) Ascertaining the material requirements of the enterprise;

(b) Placing order with suppliers for necessary materials;

(c) Storing the materials in safe and good condition;

(d) Issue of materials only against the orders of the proper authority; and

(e) Deciding the reordering level for each kind of material.

(9) Reports

A major part of control consists of preparing reports to provide information to the management for purposes of control and planning. The following are certain types of reports which are prepared and submitted tot he management regularly:

1. Top Management

(i) Profit and Loss statement

(ii) Balance sheet

(iii) Position of stock

(iv) Cash-flow statement

(v) Position of working capital

(vi) Capital expenditure and forwards commitments together with progress of projects in hand

(vii) Sales, production and other appropriate statistics

2. Sales Management

(i) Actual sales compared with budgeted sales to measure performances by

(a) Products;

(b) Territories;

(c) Individual sales man; and

(d) Customers

(ii) Standard profit and loss by products

(a) For fixing selling prices; and

(b)To concentrate sales on most profitable products.

(iii) Selling expenses in relation to budget and sales value analysed by

(a) Products;

(b) Territories;

(c) Individual salesman; and

(d) Customers

(iv) Bad debts and accounts which are slow and difficult in collection

(v) Status reports on new or doubtful customers

3. Production management

To buyer: price variations on purchased analysed by commodities.

To foreman

(a) Operational efficiency for individual operators duly summarised as departmental averages.

(b) Labour utilisation report and causes of lost time and controllable time.

(c) Indirect shop expenses against the standard allowed.

(d) Scrap report.

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