Internal Control Ensures Integrity and Safeguards the Company Essay examples

Internal Control Ensures Integrity and Safeguards the Company Essay examples

Length: 1745 words (5 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Internal Controls

An internal control is a method a company uses to ensure the integrity in the business and keeps it running in an effective and efficient way. Internal controls safeguard the assets of the company and prevent fraud from happening. There are administrative controls and financial controls, administrative control is dealing with documents and preventing fraud and financial control is safeguarding assets etc.

The purpose of Internal controls

Internal controls are put to use because this can help a company run effectively and efficiently, internal controls can also stabilize and strengthen your predicted outcomes to make them more accurate, it also safeguards a company’s assets and can detect fraud, errors and theft, for example installing cameras and alarms in the storage area to prevent people from stealing goods, or checking and reviewing the document and files of a company to ensure that there is no fraud and errors. With internal controls in place a company can run smoothly, and doesn’t cause the owner to lose valuables such as trading stock and equipment which can impact the company’s current ratio also known as the liquidity ratio since it affects their inventory.

The role of an internal auditor

Designing the internal control

The internal auditor is responsible to design the controls and develop long range audit plans, they also tests the control systems of a company to find problems in the system; they then give the company recommendations of how they could improve their system and how to make it more efficient.

Implementing the internal controls

The internal auditor is responsible to maintain the controls. While implementing the internal controls the internal auditor m...

... middle of paper ...

...on that is in charge of the business, not anyone random.
• Each employee must be in charge of specific debtors, this could reduce the possibility of fraud, theft or errors.

Documents and recording

• Every debtor should have their own books and be recorded separately
• All documents must be locked up in a safe
• All accounts should be put in a safe that indicates the time left for them to pay, for example the first level of the safe means that all the debtors have 3 months to pay off their account and the second level means that they have 2 months to pay off etc. and at the end of every month you move all the books one level up and the debtors that didn’t pay should be moved to another safe or dealt with immediately.
• If a debtor pays late it should be recorded and interest should be charged.
• All bad debtors should be considered black listed.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Benefits of Internal Controls Essay

- ... The announcement of deficiencies causes a lack of faith in the operations of the company which could cause the company’s stock to drop immediately, while investors begin to establish the extent of the damage. There are some possible limitations in the efficiency of internal controls. Some specific limitations can consist of human factors or system omissions (Financial Accountability Handbook, 2013). Some examples may include carelessness, poor judgment by staff members, or even a lack of knowledge....   [tags: safeguards, finances, responsibilities]

Better Essays
760 words (2.2 pages)

Internal Control System Of The Treadway Commission ( Coso ) Essay

- In order to deter fraudulent activities by both management and employee, many companies employ an internal control system. A system of internal controls is a group of processes and procedures in writing, that are put into place by the organization to achieve operational efficiency, effectiveness, reliable financial reporting and to encourage incorruptibility. One of the major leading authorities on the issue is an organization out of the United States called the Committee of Sponsoring Organizations of the Treadway Commission (COSO), which is a joint initiative of five private sector organizations, who provide thought leadership through the development of frameworks and guidance on enterpris...   [tags: Internal control]

Better Essays
995 words (2.8 pages)

HIPAA, CIA, and Safeguards Essay example

- The Health and Human Services (HHS) settled a case with Blue Cross Blue Shield of Tennessee (BCBST) for $1.5 million for violating the Health Insurance Portability and Accountability Act (HIPAA) and security rules. There are security issues with BCBST in regard to confidentiality, integrity, availability, and privacy. There are also security requirement by HIPAA which could have prevent the security issue if it has been enforced. There are correction actions taken by BCBST which were efficient and some may have not been adequate....   [tags: legal issues, privacy]

Better Essays
1633 words (4.7 pages)

Internal Controls Protect Businesses Essays

- American stockholders have billions if not trillions of dollars invested in various publicly traded companies throughout the country. With that much money involved, it is only wise that there be control measures and safeguards put into place protect these investments from any unlawful or irresponsible activity. Publicly traded companies are required by law to develop such measures. These measures are often referred to as internal controls. These internal controls exist for two main reasons. One reason being, to keep the employees honest....   [tags: Internal Controls, ]

Better Essays
868 words (2.5 pages)

The Importance of Ethical Integrity Essay

- What is ethical integrity and why is it important. This paper will address the viewpoint of ethical integrity and its outcome. Ethical Integrity is a favorably sensible method for doing what is right when it comes to people dealing with people. In today’s society, ethical integrity has become a modern lifestyle. When a person has a strong moral character, they are said to be a person of integrity and to live a honest life is said to be the most important virtue a person can have. Consistency is a concept of ethical integrity and people should act according to their moral principles....   [tags: Ethical Integrity Essays]

Better Essays
1606 words (4.6 pages)

Security Controls Are Technical Or Administrative Safeguards Essays

- Case 5 Security controls are technical or administrative safeguards or counter measures to avoid, counteract or minimize loss or unavailability due to threats acting on their matching vulnerability, i.e., security risk. Controls are referenced all the time in security, but they are rarely defined. The purpose of this section is to define technical, administrative/personnel, preventative, detective, and corrective compensating controls, as well as general controls. Basically they are categorized in following way • Preventive • Corrective • Detective Secure Configurations for Network Devices Think about firewall, switch, and switch arrangement against standard secure setups characterized for e...   [tags: Security, Physical security, Access control]

Better Essays
754 words (2.2 pages)

Internal Controls Of Sales And Cash Business Essays

- The class learning objectives for the period of weeks three through five focused on mitigating risk in business processes through the design of internal controls. The business process covered were sales, sales returns, and cash collection processes, as well as purchases, payroll, and fixed assets. Also covered was risk prevention internal controls based on the authorization of transactions, segregation of duties, adequate records and documentation, security of assets, and independent checks and reconciliation....   [tags: Internal control, Internal audit, Audit, Auditing]

Better Essays
922 words (2.6 pages)

State Of Indian Internal Audit Charter Essay

- STATE OF INDIANA Internal Audit Charter Introduction Internal Audit is an independent, objective, assurance, and consulting activity designed to add value and improve operations. It helps accomplish objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes. Internal Audit is organized to examine and evaluate current and proposed processes and controls. The objectives of Internal Audit are to: 1. Promote effective and efficient controls through audits, reviews and objective consulting arrangements....   [tags: Internal audit, Auditing, Internal control, Audit]

Better Essays
1014 words (2.9 pages)

Armed Forces Internal Controls Essay

- Internal controls are necessary for any business to function and be successful. This also includes the armed forces. Each branch uses some form of internal controls in daily operations to ensure that there are not casualties of service members or civilians. Daily operations are crucial in the protection of innocent lives. To ensure that civilians are protected service members must ensure they follow all technical orders to perform their jobs correctly and safely. Everything from a service member being paid for travel to launching an aircraft is monitored by internal controls ("Financial management reports,")....   [tags: Safety, Launching an Aircraft, Internal Controls]

Better Essays
1221 words (3.5 pages)

The Importance of Academic Integrity Essay example

- Introduction On a research paper, how much information can you “borrow” with or without citing the original author?  How do you cite the resources you “borrowed” or quoted from the original author?  Will anyone know if you submit a friend’s research paper?  No one can see you taking an online test from your living room – should that change how you take a test?  Who is hurt by academic dishonesty. Who cares if you steal test answers, falsify experimental data, cheat on an exam, or download information from a web site and turn it in as your own work....   [tags: Ethical Integrity Essays]

Better Essays
1288 words (3.7 pages)