The primary control activity refers to establishing responsibility, which presumes assigning different kinds of liabilities to particular workers. Typically, the most effective results occur when one task is allocated to one specific person. The second principle is the segregation of duties that stand for distributing different tasks to different employees. The responsibility for storing something must be separated from physical control over it (Doxey, 2019).
Documentation procedures are the third control activity which implies providing evidence that some operations have occurred. Each transaction should be taken into account to ensure the legality of the processes. Physical control means safeguarding organizational assets and increasing the preciseness and reliability of all records. The fifth principle, named human resource controls, stands for uniting employees, their rotation, vacation schedule, and other checks. Finally, independent internal verification is supposed to periodically or, on a sudden basis, check records and operations (Doxey, 2019). Any discrepancies identified are reported to the management department, and people who check employees’ information are independent of their influence.
I think documentation procedures are vital for the online retail store since there is a threat of conducting illegal transactions via online services. Moreover, I suppose that such activity as human resource controls should provide insurance protection to avoid employee theft. Hence, fraud monitoring is the most significant risk for such business, and the transaction validation system should be devised to prevent any losses. Meanwhile, the brick-and-mortar retail business demands such internal control as physical control to ensure the safety of assets and enhance the accuracy of accounting statements. In addition, it is vital to conduct independent internal verification in order to ensure employees’ transactions are held on a legal basis.
Reference
Doxey, C. (2019). Internal control toolkit. Wiley.