The five components of internal control are: control environment, risk assessment, control activities, monitoring, and information and communication. Management is responsible for the components of internal control. The control environment provides discipline and structure. Internal controls are more effective when the duties are segregated instead of being performed by the same person. The manager is the employees responsible for overseeing the internal control system. He may delegate part of the function to other employees in order to facilitate the process. The control environment is established by the managers of the company. The use of internal auditor can help companies determine if the control activities of a company are adequate and if the environment is suitable to foster proper ethical conduct by the accounting staff and other employees of the company. Risk assessment must be performed in order to minimize the risk exposure of the company. A firm that is issuing a secondary round of common stocks must ensure that the market conditions are adequate to launch the issuance of new common stocks. If the manager does not assess the event adequately the company may not be able to raise the desired capital because the stock may sell at a price below the expectations of the company. . GAAS requires managers to assess control risks. A proper assessment of control risk includes the evaluation of the internal controls.
The paper presents the methods through which the researcher has addressed the company’s record-keeping practices, credit approval policies, existence of supervisory control, extent of segregation of duties, application of accounting laws, reconciliation exercises, year-round uniformity in practices, and timeliness.
The research includes a list of internal control weaknesses such as the department,not the purchasing department,should make the purchase requisition,the receiving department should not give the original receiving report to the warehouse,the receiving repot,checks,disbursement vouchers,purchase orders
I have to indicate the weaknesses in internal accounting controls in the handling of collections. Discussion The first thing I would recommend is that an audit of the Church’s financial records be undertaken. It is preposterous that no audit has been made in recent years because the same trusted employee has kept both the Church records as well as served as Financial Secretary for the last 15 years.
As a member of the AICPA, Harold Potter has some responsibilities to his customers and the wider society. This is because the AICPA has rules that each member has to adhere to. In the case at hand, there are nine cogent issues that are either breaches or high risk events that could make Harold Potter liable to several actions by the AICPA which could be as severe as getting his membership taken away from him.
The web based tools and the internet facilitate many useful activities of a business that influence customer and suppliers relationship. Need for online control has risen to help guide online based transactions because security is of concern. Current profusion of online controls like encryption, digital certificates, digital signatures, virtual private networks has created difficulty in understanding objective of online controls.
The purpose of an external audit is to provide assurance about the reliability of the published accounts of the particular audited body. It also provides the reassurance regarding the regularity of the fundamental transactions. External audits provide information concerning the efficiency and effectiveness with which a particular organization is performing its functions (Henley, 1989).
In this regard, we utilized the concept of a secret shopper by pretending to be customers but doing it for another purpose; it is to evaluate commercial establishments not only for the quality of their services and products but
This paper is a report on the purchase and payment and the receipt and sales functions. The purchase and sales functions of this business happens to have some weaknesses which can be remedied by the implementation of the recommendations that have been tabulated. The purchase and the sales function of a business are important to a business.
In the recent story carried by the New York Times, the corporation is at a very high risk of incurring huge losses if measures are not
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The five components of internal control are: control environment, risk assessment, control activities, monitoring, and information and communication. Management is responsible for the components of internal control. …