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Internal control as a function of management
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Recommended: Internal control as a function of management
What is internal control? According to University of Phoenix, Axia College Internal Control and Cash (2009), internal control is all of the related methods and measures adopted within an organization to safeguard its assets and enhance the accuracy and reliability of its accounting records. The primary reasons for internal control are help companies protect their investments and merchandise against theft from everyone, including employees and to make sure that the accounting is done correctly and truthfully. There are six principals of internal control that apply to most enterprises. Establishment of responsibility- gives only one employee responsibility over a certain task. Someone is less likely to steal if they are the only person that can be linked back to a task. Segregation of Duties- different people are responsible for related activities and record keeping for assets is kept separate from physical custody of assets. Physical, Mechanical, and Electronic control- Physical controls relate to the safeguarding of assets, examples would be safes and locks. Mechanical and...
Internal controls is defined as a process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance
The purpose of the internal audit is to protect Costco 's assets through evaluating the acceptability and efficiency of internal controls; recognizing areas of possible risk, revenue improvement and/or cost reductions; and making sure transactions are authorized, completed, and logged as proposed. The internal auditors are accountable for guiding audits of all Costco’s local and global activities, its affiliates, and other entities Costco conducts business with as deemed necessary by management.
Dodd-Frank and Sarbanes-Oxley Acts are important legislations in the corporate world because of their link to public and privately held companies. Sarbanes-Oxley Act was enacted to enhance transparency and accountability in publicly traded companies. On the contrary, Dodd-Frank Act was enacted to disentangle the confused web of financial service company valuations. Actually, these valuations are usually hidden by complex and unclear financial instruments. The introduction of Sarbanes-Oxley Act was fueled by recent incidents of accounting frauds by top executives of major corporations such as Enron. In contrast, Dodd-Frank Act was enacted as a response to the tendency by banks, insurance companies, hedge funds, rating agencies, and accounting companies to serve up harmful offer of ruined assets and liabilities brought by systemic non-disclosure (Anand, 2011, p.1). While these regulations have some similarities and differences, they have a strong relationship with the financial markets.
Internal locus of control is how you as a person dictates how their work or personal life is going to go. Meaning the results of something is based on ones behaviors and actions. For example, getting the new job promotion and you knowing that you got the job for your hard work and not because you think, it is out of pure luck.
In controlling, organization has lots of risk factors .Manager take some employee who is able to control and handling risk factors.
Implement physical security: - “Physical security protects people, data, equipment, systems, facilities and company assets” (Harris,
Controlling in management is a function of management that is concerned with making sure that all other functions of the management are put in place and operated effectively. Controlling ensures that it has taken into consideration the monitoring of the output of the employees as well as the establishing standards of performance that will guarantee that the performance of the will always meets the set standards (Spellman,
1. What important internal controls were ignored when LJM1 was created? Internal controls are those company policies that are established to safeguard company assets, to ensure that accounting records are prepared in a reliable manner and to guarantee the achievement of organizational objectives (Wilson & Key, 2011). LJM1 ignored several important internal controls by violating Enron’s code of conduct.
Ouchi, W.G. 1979, ‘A Conceptual Framework for the Design of the Organizational Control Mechanism’, Management Science, vol.25, no.9, pp.833-848, viewed 26 April 2014,
... signage and prohibited areas in case of chaos/evacuation and privacy respectively. Risk management would be handled from within the staff that has their certificates and training in the field and knows protocols to follow in those situations.
Physical security is a very important aspect of business management that often gets overlooked and causes harm to companies worldwide.. Physical security is the protection of personnel, hardware, software, networks and data from physical actions and events that could cause serious loss or damage to a business, enterprise, agency or institution. Physical security also includes protection from fire, natural disasters, burglary, theft, vandalism, and terrorism. This includes protection from fire, flood, natural disasters, burglary, theft, vandalism and terrorism. It is important that businesses worldwide take the initiative to incorporate a number of policies and procedures in place to secure the business of physical harm (Hutter, 2016).
There are three categories of control: policies, programs and technical control. Controls can be classified as :
It is not detected, prevented or modified on a timely basis by client’s internal control system. It will occur in account balance, disclosure or class of transactions. This risk is a function of the effectiveness of the design and operation of an entity’s internal control. The control risk may not be zero, it may be minimal. Some control risk may always exist, it is due to the inherent limitations of internal control.
The purpose of this report is showing how to apply the control process in the
Controlling is the process of monitoring development and applying modifications. Hershey’s must be aware of how internal factors can affect control. By reviewing annual reports Hershey’s can get a general idea of what products are selling. If sales are low, marketing may need to see about alterative marketing strategies.