Management Awareness
What are the benefits of a comprehensive control program? If you were advising this corporation, what would be the specific benefits for them?
The benefits of a comprehensive internal control program include: the ability to monitor for unusual activities and it will increase vigilance. This will help to prevent fraud by providing actuaries with an actual way of discovering when these events are occurring through early detection. It is at this point that the negative impact on the firm and various stakeholders can be minimized. (Silverstone, 2011, pp. 14 -- 16)
Once this has been consistently implemented, is when it will have an impact on the entire organization by creating an atmosphere that is looking for these issues. When different staff members are actively involved in the process, this will make it difficult to be able to conduct any kind of fraudulent activities. In the future, this will prevent these situations from happening by encouraging everyone to report their findings immediately. As a result, this kind of thinking will help to create way of monitoring and enforcing various anti-fraud provisions. (Silverstone, 2011, pp. 14 -- 16)
In the case of the corporation that is being advised, these procedures will increase accountability and prevent the misuse of company funds. This is because monitoring for unusual activities will help actuaries to determine where this is happening. Once this takes place, is when executives can quietly deal with these challenges while they are small. This will prevent any kind frauds from occurring and it will establish procedures for greater oversight. In the future, this will give investors' confidence in the numbers and figures that are provided by the firm. This will help to improve the corporation's credit rating and image among various stakeholders. (Silverstone, 2011, pp. 14 -- 16)
What would be the procedures that should be considered for detective controls, including...
A system for reporting revenues and expenses will serve as the foundation for monitoring the transactions of the firm. The way that this will be accomplished is all revenues and expenses must be reported directly to the accounting department. They will make any kind of notations under the budget that has been allocated for this segment. In the event that they are facing financial challenges, is when the transactions and total revenues can be carefully examined. This will help actuaries to determine what activities are contributing to the challenges facing a specific department. It is at this point that executives can begin discussing why managers have authorized specific purchases (which may not have had any kind of financial benefit for the firm). (Bizmanualz, 2002, pp. 34 -- 39)
The use of the double entry accounting system will prevent someone from entering fraudulent information about a transaction. This is because all expenses and revenues will have to be recorded twice in different ledgers. In the event that there is any kind of questionable activity, the firm can consult with the ledger to determine what were the total expenses and profits from a specific transaction. This will improve accountability, by making it difficult for a group of employees to provide false data. Instead, the double entry system will serve as a tool that can be used to check and verify any kind of questionable figures. In the future, this will allow managers to effectively deal with these challenges when they are small. This is the point, that they can understand what is happening and will know what specific steps must be taken to rectify the situation. (Bizmanualz, 2002, pp. 34 -- 39)
If this kind of approach is used on a…
