Security and Loss Prevention - Assignment Example

Second, the internal control program will discourage the fraud-minded employees and management staff from implementing their illegal acts. Third, the company’s usual fraud and error occurrences will be reduced or even eliminated. Fourth, investors will have more confidence in a company that has a comprehensive internal control program in place. Last, companies can prepare more realistic financial statements will be prepared to the different stakeholders of the company (Hillison, 1999). There are several specific benefits of implementing the comprehensive control program.

First, implementing a control program that includes allowing only authorized persons to enter the accounting office will prevent unauthorized persons from manipulating the accounting data in order to present false financial reports. False reports include presenting fraudulently presenting a higher sales amount compared to the actual sales figure. Second, one can specifically advise the company to implement passwords to access all computer database and other computer software programs. For example, the use of passwords will similarly prevent the marketing manager from increasing the sales figure in order to show management that the sale management’s monthly sales quota was achieved. . The use of passwords will identify to the person who altered accounting entries such as inventory amounts and sales amounts.

Third, one can specifically advise the company that internal control will ensure financial statement balances are more reliable. Internal control will indicate the inventory balance is presented in the financial statements are more reliable compared to inventory reports where control programs are absent. Internal control procedure includes comparing the physical count of the inventory as basis for correcting reported inventory amounts shown in the inventory records. Internal control of having another person check the recording of the receivables accounts by comparing the sales invoices with the amounts recorded in the financial reports will ensure the accounts receivable balances are efficiently and effectively recorded on time and in the proper accounting periods (Bierstaker, 2006).

Fourth, one can specifically advise the company that control program procedures will ensure compliance with applicable government laws and regulations. For example, installing an accounting program that will automatically compute the taxes for each accounting period will prevent the accounting personnel from erroneously or fraudulently preparing a fraudulent or erroneous report. The erroneous or fraudulent report will indicate the company must pay a lower amount of taxes when compared to the computer generated higher actual tax liability.

The internal control procedure includes ensuring the computer software is constantly updated to reflect the updated tax laws rates on income tax and other related business taxes (Bierstaker, 2006). In terms of detective control procedures, there are several procedures that must be