Essay On Internal Control

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Internal control is the most important business practice of the company, and it ensures the accuracy and reliability of financial reporting and protects the resources from any fraudulent activities. As technology grows, the number of computer based crimes and fraud increases; however, it is possible to control this computer based crimes with effective and efficient internal control systems within the company. According to Whittington & Pany (2014), the impact of IT on the auditing process is great; therefore, the auditors should consider and understand client’s internal control, data retention and processing policies in planning and timing of the audit. Some businesses might use more user-operated computers and think that it does not require …show more content…

According to CSU-Global (2016), internal control is a process that requires series of ongoing activities and actions, and it can provide only reasonable assurance that all the organization’s objectives will be met. Therefore, the management must establish control activities that are effective and efficient within the company and including controls over technology. According to Turner & Weickgenannt (2013), there are five control activities such as: Authorization of transactions, segregation of duties, adequate records and documents, security of assets and documents, and independent checks and reconciliations. According to the auditor, only one employee did all different tasks at Norton Corporation, and that one employee authorized adjustments to the total amounts of stock recorded by the computer. In any organization, the work related procedures and tasks must be done through a specific authorization from a manager before any transaction can be completed. In addition, it was not clear that the employees of the company was well trained and understood when the general or specific authorization was needed or not. The manager must establish the segregation of duties, authorization process and practice to ensure that the guidelines are followed by the employees; that way, the company could keep the assets and documents secure and free of perpetrating fraud. According to Whittington and Pany (2014), authorization of any transactions may be accomplished by assigning to authorized terminal users an identification name that must be used before the system would accept the data and maintain a log of activities for evidence of unauthorized use. Not only utilizing the segregation of duties and authorization of

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