Cost and Benefit of Internal Control

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Internal control is a method of internal accounting preformed by a company, small or large, in order to improve efficiency and effectiveness through internal audits and inspections. According to internalaudit.wsu.edu, internal control is geared to the achievement of objectives in several overlapping categories, which can benefit the overall profitability of the company. Internal control is used within a company and the information is used within the company to solve a current issue or to increase the company’s productivity. Managers, officers, sales staff, and budget officers use internal accounting within the company. Internal control is not mandatory by law but according to, http://accountlearning.blogspot.com, internal control is essential for a business to run in a cohesive manner. From my research, I have found that the benefits of internal control far outweigh the cost in the overall success of a company. Internal control protects the assets of the company from theft since accounts are closely being watched within the company. Internal auditors help reduce theft and misallocation of recourses within the company since the accounts are continually reviewed and monitored in internal control. Internal control can reduce losses within a company by catching thievery within the company. According to hirepowerassociates.com, the U.S. Chamber of Commerce has evaluated that 75% of all employees have stolen at least once from the company they work for which accounts a loss of over $5 billion in American businesses. Internal control is also beneficial to a company because it helps management in decision-making and with the implementation of plans. According to businessknowledgesource.com, internal control analyzes problems within t... ... middle of paper ... ...earning.blogspot.com/2012/02/concept-of-internal-control-and-its.html 4) "Pros and Cons of Internal Audits." , Finance Info and Money. N.p., n.d. Web. 22 May 2014. http://www.businessknowledgesource.com/finance/pros_and_cons_of_internal_audits_026391.html 5) "At Large and Small Companies, Internal Controls Matter." DealBook At Large and Small Companies Internal Controls Matter Comments. N.p., n.d. Web. 22 May 2014. http://dealbook.nytimes.com/2012/04/05/at-large-and-small-companies-internal-controls-matter/?_php=true&_type=blogs&_r=0 6) The Statistics On Employee Theft Are Staggering. Step One Survey II (n.d.): n. pag. Http://www.hirepowerassociates.com/. Web. 18 May 2014. http://www.hirepowerassociates.com/pdfs/StepOneSurveyII.pdf 7) "Internal Controls." PwC. N.p., n.d. Web. 22 May 2014. http://www.pwc.com/ca/en/private-company/lets-talk/internal-controls.jhtml

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