Internal Control in the Business - Essay Example

They include; orderly and efficient conduct of business, adherence to management policies, safeguarding of company assets, prevention and detection of fraud and error, accuracy and completeness of accounting records, and timely preparation of reliable financial information (Simkin, Rose & Norman, 2012). The world business network has encountered challenges involving the internal control systems in businesses; hence there has been deliberate monitoring of the area through legislation and authentic reports.

These have provided guidelines on how to incorporate internal control systems in small and big businesses. For instance, the Sarbanes-Oxley Act, Section 404 that requires public companies to operate with an internal control system (Simkin, Rose & Norman, 2012). In addition, it ought to be effective and audited by an external auditor regularly (Li, Peters, Richardson, & Weidenmier, 2012). Others include; the Committee of Sponsoring Organizations (COSO) report whose focus is on enterprise risk management, COBIT, and SAS NO.

112 just to mention a few (Simkin, Rose & Norman, 2012). The growth in information technology has prompted some business security measures. For instance, COBIT (Control Objectives for Information and related Technology) was formulated to put checks on the exposure of data through computers. The involvement of IT in business has resulted to benefits and risks in the internal control systems of the businesses (Simkin, Rose & Norman, 2012). On its establishment, COBIT came up with objectives that would govern the internal control of information and related technology which it has continued to improve over time.

The control objectives include; strategic alignment, Realization of expected benefits of IT, Continual assessment of IT investment, Determine risk appetite, measure and assess performance of IT resources (Simkin, Rose & Norman, 2012). There are five components that constitute