Final answer:
Segregation of duties and reconciliation are fundamental methods of internal control that help minimize risks in business operations.
Step-by-step explanation:
One of the most fundamental methods of internal control is the segregation of duties. This means separating the tasks and responsibilities of different individuals to prevent any single person from having complete control over a process or function. For example, in a company, the person who handles finances should not be the same person who approves payments or reconciles bank statements.
This segregation of duties helps to minimize the risk of fraud, errors, and mistakes. By having multiple employees involved in critical processes, there is a system of checks and balances in place.
Another important method of internal control is reconciling financial statements. This involves comparing two sets of records to ensure they agree. For instance, comparing bank statements to cash book records helps to identify any discrepancies and ensure that all transactions are recorded accurately.