Internal Control Essays (Examples)

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Internal Control
PAGES 3 WORDS 924

Internal Control
In the United States, all corporations planning to go public have to maintain an adequate internal control system. LJB is a small company that does local distribution and wants to go public. The president has decided to get an independent audit firm to carry out the assessment while identifying its areas of weakness. In case failure is reported by this audit firm, it could be fined or the officers could go to prison. Internal controls help in detecting any errors in the report from accounts and also protect assets. This also helps in efficiencies as law and order is followed by the company operations (Tysiac 2012).

There have been human errors that are caused by over working or wrong assumptions by members of staff. There are also some fraudulent human beings who can rip off a company if it's not well protected internally. This allows the law to enforce external….

Internal Control
PAGES 2 WORDS 580

Internal Control
he Importance of Internal Control Programs

An effective internal control program in an organization ensures the efficiency of its operations and helps a business to attain its objectives by minimizing the chances of violation of rules and regulations by the employees. It safeguards the organization's assets and promotes the reliability of the accounting and financial information. Failure to implement an effective internal control program results in a corporate culture in which employee theft and fraud and financial misreporting thrives. he importance of having an effective 'internal control program' is reflected in a 2002 Report which estimates a loss of $600 billion in 2001, or about $4,500 per employee, as a result of on-the-job fraud in the United States. (Quoted by Gibson and homas, 2003)

Effective Internal Control echniques

he commitment of the senior management towards an effective Internal Control Program is crucial for its success. he management must look at internal control….

Internal Controls
Organizations have the responsibility of accounting for all of their financial and operational data in an effective and efficient manner that is in compliance with all regulations as well as industry practices. Having a set of internal controls in place can help streamline an operation which provides a level of efficiency as well as offers protections again various risks. The SEC has been in an increasingly important role and has received increased power in 2002 when legislation for the Sarbanes-Oxley Act was passed. Although most of the rules and regulations under this act affect only publically held companies, many of the required accounting procedures can serve as best practices for companies that are not publically owned.

Quality assurance is generally one of the most important aspects to constructing a set of internal controls. Internal controls can assist with analyzing processes and monitoring operations to ensure that high quality standards are….

Internal Controls
Companies need to be aware of the varying influences that are acting upon their organization. One method of examining the current situation is to divide the perception into ideas and influences that are arriving from the external environment and those that are internally controlled. Internal controls are important because they rely on leadership, courage and skill for these actions to take hold. The purpose of this essay is to prepare a comprehensive checklist for evaluating controls. The essay will use Louwers et al. (2007) basic five tiered framework to create this checklist and ensure that it can indeed be used for practical and pragmatic purposes at the internal business strategic level.

The checklist is divided into 5 distinct sections: Control Environment, Risk Assessment, Control Activities, Information and Communication, and finally, Monitoring. Each component of this checklist plays an important role in ensuring that a company or organization is on the….


Defining internal control techniques usually need ethics as base reference. This is because the condition of employees must always be considered, whether an internal control will positively or negatively affect the people within an organization. Thus, when establishing an internal control program, the "good for all" must always be the objective. While internal control techniques define what is good for an organization, the employees who comprise an organization must therefore benefit that "good." And, what is good must always be in accordance to the values of ethics.

Define the Importance of the Sarbanes-Oxley Act

The importance of the Sarbanes-Oxley Act is apparent in the treasury management of corporations. According to Steven Krippner, on the purpose that Sarbanes-Oxley Act serves, it protects investors by improving the accuracy and reliability of corporate disclosure..."

The Sarbane-Oxley Act is important because it regulates and protects investors, especially those who file financial reports in accordance to the Security….

and, most internal auditors are still reporting to the CEO or chief financial officers -- the very people who were responsible for most of the past enormous scandals. Therefore, the affectivity of internal audits in correcting the original problems that caused the Enron scandal, for instance, is minimal at best right now. While SOX requires management to test internal controls over financial aspects of the corporation, this reporting structure poses obstacles.
Risk Management

While risk management, as part of corporate governance, includes identifying and tracking all risk areas and developing plans to deal with those risks, including fraud, it is clear that only with frequent re-assessment can risk management become an effective tool to control illegal and unethical practices. Again, along with other effective corporate governance activities and responsible company management, risk management has the potential to avoid another Enron.

Conclusion

HealthSouth Corp., Chiquita rands, AIG, ernard Madoff -- all are financial scandals….

The CEO of ENRON attempted to give a rosy picture of the company financial position to protect his own investment in company shares.
As a part of internal control, the accounting function and actual physical stocks should not be managed by the same person. This removes the temptation of cooking the books and allowing the stock to disappear without anyone noticing the fraud.

Protecting computer records through limiting access to accounting and record functions protects integrity of records and also removes the risk of unauthorized persons altering the records to commit fraud.

Regular and independent audits are essential for internal control. Failure of internal control is most often due to failure of proper supervision and independent checks of business related matters. Auditor must understand the business, its internal controls and the business environment to audit the system.

Internal controls helps business to achieve its performance and profitability objectives without risking the problems that….

Internal Control Systems
Internal Control

This paper examines the premise that, within any organization, there are inherent limitations of internal control systems. Internal controls are established to meet certain business requirements, and are intended to:

Protect an organization from waste, fraud and inefficiency

Ensure the accuracy and reliability of accounting and operating data

Secure compliance with the organization's policies

Evaluate the performance of units within the organization (Kansas State University, 2003).

Given these goals, it can be seen that internal controls relate to good business practices.

The challenge of establishing and maintaining internal control lies in the fact that there is just no such thing as the perfect control system. Given that the cost of implementing a control should not exceed its expected benefit, then that constraint in itself implies an upper limit on what is possible for an organization to implement. As Trenerry (1999, p.20) observes, "Most internal control systems are cost-effective and are designed with a….

Other people simply want to live beyond their means and see committing fraud as the way to receive extra money so they can continue to live a lifestyle they would otherwise not be able to afford. If they are angry at their managers or hate their jobs, there is also the possibility of committing fraud simply to "get back at" the person or persons they feel have slighted them. While none of these are good reasons to commit a fraudulent act, they are some of the most common reasons that have been offered when people who are committing fraud in the workplace have been caught.
Focusing on ethics can help prevent fraud, but it will not stop everyone. Additionally, more than ethics are needed in order to make sure procedures are followed properly. Often, there is no intended fraud or financial mistakes - only carelessness and misunderstandings left unchecked. Swift….

Internal Control Frameworks
Compliance models. Internal controls are processes that are designed to offer reasonable levels of assurance that objectives can be met in several important areas, including the reliability and security of financial reporting, the efficiency and effectiveness of operations, and legal and regulatory compliance. Many versions of compliance models exist that can serve as the foundation for organizational compliance initiatives. These compliance models are more suitable for certain industries than for other industries. The following description explores two compliance models and identifies relevant industries in which the models could be successfully employed.

Domain model for internal controls compliance. A close relation exists between business process management (BPM) and internal controls management (Namiri & Stojanovic, 2007). The process of constructing the architecture between the two entities entails identification of the significant accounts in the company and identification of the business processes that affect the accounts (Namiri & Stojanovic, 2007). Control objectives….

Internal Control
The purchase orders are not always considered by Competition Bikes Inc. In the company's purchase system, control authorization and record retention are not frequently addressed. Generally speaking, purchase orders are appropriate for merchandise purposes. On the contrary, the Competition Bikes Inc. pays for unordered goods or excessive quantity without referring to company financial policy.

Competition Bikes Inc. does not consider all pertinent information concerning formal commitments during the transaction. Obviously, delivery means, payment terms and account distribution should be considered for the purpose of transparency and accountability in business. On the other side, materials received early or late may result in business interruption or excessive levels of inventory.

Weakness Corrective Actions

Independency between purchasing agent or buyer and supplier should be maintained. This can be accomplished through periodic buyer rotation, participation in purchase contracts, or the use of commodity teams. Other compensating controls should exist if business conditions make the above impractical.

All….

The need for reconciliation is important here because it allows management to match the transactions with the money taken in for those transactions. The stubs presumably have numbers on them, which would allow management to reconcile specific stubs, but even at that management would have no way to actually track the transaction, it would simply know that a stub was missing, or that there were more stubs than money. So the need for reconciliation is important, but in this case if there is an option for Separation of Duties that would be more important. In addition, reconciliation is only possible if the stubs have the value of the ticket on them -- otherwise it is only possible to know how many customers there are, but not if some of them were seniors, children, students, matinee customers or any other group subject to a discount.
The control objective is to minimize….


However, internal controls are more than just discovering errors and irregularities, controls go hand in hand with internal audits. Audits differ from controls in that an audit will provide "an objective, independent review of bank activities, internal controls and management information systems to help the board and management monitor and evaluate internal control adequacy and effectiveness" (Comptroller p. 2).

Using audits and internal controls to provide information for the smoother and more seamless operation of a bank or financial firm can be composed into a governance system. The system would spell out the controls, standards, methods and designs for the entire operations. The Banking Regulation and Supervision Board recently published a statement that defined internal control systems. It stated that the internal control system would include "all of the financial, operational and other control systems which are carried out by internal controllers and which involve monitoring, independent evaluation and timely reporting….

Internal Controls
Provide an example of an item that pertains to either (a) the internal control environment (the umbrella) or (b) a monitoring activity or (c) a risk assessment activity that relates to Microsoft Corporation.

In 2002, the SEC settled with Microsoft on allegations of accounting violations that understated revenues. Microsoft did not admit to any wrongdoing. The settlement did call for the corporation to cease and desist from misstating income, without requiring any restatement of earnings reports. The SEC finding was based on Microsoft's noncompliance with Generally Accepted Accounting Principles (GAAP) in which material amounts of income were misstated in certain periodic filings with the SEC during the period from July 1, 1994 to June 30, 1998. Underscoring the audit finding by the Commission, was both an absence of documentation for the bases used for the accounting and evidence that Microsoft failed to maintain proper internal controls. A spokesman for SEC,….

Internal Controls
PAGES 3 WORDS 816

President
Inform the President of any new internal control requirements if the company decides to go public.

Instituting a system of internal checks and balances would be foremost in my recommendations to the company president since most internal control systems provide for independent internal verification; this principle involves the review of data prepared by employees. To obtain maximum benefit from independent internal verification:

Companies should verify records periodically or on a surprise basis.

An employee who is independent of the personnel responsible for the information should make the verification.

The company should also look at incorporating a Voucher Control System. Most medium and large companies use vouchers as part of their internal control over cash disbursements. A voucher system is a network of approvals by authorized individuals, acting independently, to ensure that all disbursements by check are proper.

When looking to hire new employees, it is vital that the company utilize the extensive resources on the….

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3 Pages
Case Study

Accounting

Internal Control

Words: 924
Length: 3 Pages
Type: Case Study

Internal Control In the United States, all corporations planning to go public have to maintain an adequate internal control system. LJB is a small company that does local distribution and…

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2 Pages
Term Paper

Business - Management

Internal Control

Words: 580
Length: 2 Pages
Type: Term Paper

Internal Control he Importance of Internal Control Programs An effective internal control program in an organization ensures the efficiency of its operations and helps a business to attain its objectives by…

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3 Pages
Essay

Business - Management

Internal Controls Organizations Have the Responsibility of

Words: 697
Length: 3 Pages
Type: Essay

Internal Controls Organizations have the responsibility of accounting for all of their financial and operational data in an effective and efficient manner that is in compliance with all regulations as…

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3 Pages
Essay

Business - Management

Internal Controls Companies Need to Be Aware

Words: 772
Length: 3 Pages
Type: Essay

Internal Controls Companies need to be aware of the varying influences that are acting upon their organization. One method of examining the current situation is to divide the perception into…

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3 Pages
Term Paper

Business - Management

Internal Control Programs Are Important

Words: 697
Length: 3 Pages
Type: Term Paper

Defining internal control techniques usually need ethics as base reference. This is because the condition of employees must always be considered, whether an internal control will positively or negatively…

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2 Pages
Essay

Accounting

Internal Controls SOX and Corporate

Words: 664
Length: 2 Pages
Type: Essay

and, most internal auditors are still reporting to the CEO or chief financial officers -- the very people who were responsible for most of the past enormous scandals.…

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4 Pages
Term Paper

Business

Internal Control Failure the Collapse

Words: 1283
Length: 4 Pages
Type: Term Paper

The CEO of ENRON attempted to give a rosy picture of the company financial position to protect his own investment in company shares. As a part of internal control,…

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3 Pages
Essay

Accounting

Internal Control Systems Internal Control This Paper

Words: 959
Length: 3 Pages
Type: Essay

Internal Control Systems Internal Control This paper examines the premise that, within any organization, there are inherent limitations of internal control systems. Internal controls are established to meet certain business requirements,…

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5 Pages
Research Paper

Healthcare

Internal Controls in the Healthcare

Words: 1812
Length: 5 Pages
Type: Research Paper

Other people simply want to live beyond their means and see committing fraud as the way to receive extra money so they can continue to live a lifestyle…

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2 Pages
Essay

Business

Internal Control Frameworks Compliance Models Internal Controls

Words: 580
Length: 2 Pages
Type: Essay

Internal Control Frameworks Compliance models. Internal controls are processes that are designed to offer reasonable levels of assurance that objectives can be met in several important areas, including the reliability…

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2 Pages
Essay

Business

Internal Control the Purchase Orders Are Not

Words: 718
Length: 2 Pages
Type: Essay

Internal Control The purchase orders are not always considered by Competition Bikes Inc. In the company's purchase system, control authorization and record retention are not frequently addressed. Generally speaking, purchase…

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2 Pages
Essay

Economics

Internal Controls What Are the

Words: 594
Length: 2 Pages
Type: Essay

The need for reconciliation is important here because it allows management to match the transactions with the money taken in for those transactions. The stubs presumably have numbers…

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5 Pages
Term Paper

Economics

Internal Controls My Application for

Words: 1293
Length: 5 Pages
Type: Term Paper

However, internal controls are more than just discovering errors and irregularities, controls go hand in hand with internal audits. Audits differ from controls in that an audit will provide…

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3 Pages
Essay

Economics

Internal Controls and How Corporations Get Around Them

Words: 1001
Length: 3 Pages
Type: Essay

Internal Controls Provide an example of an item that pertains to either (a) the internal control environment (the umbrella) or (b) a monitoring activity or (c) a risk assessment activity…

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3 Pages
Term Paper

Careers

Internal Controls

Words: 816
Length: 3 Pages
Type: Term Paper

President Inform the President of any new internal control requirements if the company decides to go public. Instituting a system of internal checks and balances would be foremost in my recommendations…

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