Essays on Internal Control

Audits: Materiality, Risks, and Internal Controls
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The audit process is a set of eight sections, including materiality, risks, and internal controls. Auditors determine with reasonable certainty that financial statements are free from material misstatements. The only way auditors can complete this task is by determining the level of misstatements during audit planning, starting with preliminary judgments, and ending at using materiality when evaluating the audit findings. Auditors must consider various risks associated with planning and completing an audit. Risks which could affect the completion of an…...
AccountingControlFinanceInternal ControlRiskRisk Management
The Role of an Internal Auditor in Risk Management
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Pages • 5
Introduction An internal audit is a complete evaluation of the company’s functions in terms of risk management; that is, the internal auditor monitors the organization for the risk of monetary loss or lower-than-expected earnings due to unforeseen circumstances. In fact, the Position Statement of the international organization, the Institute of Internal Auditors (2004) states that the enterprise-wide risk management tasks performed by these individuals assist the organization by improving the understanding of the risk that the organization faces, by improving…...
AuditBusinessInternal ControlRisk Management
Sales and Collection Cycle
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Pages • 8
Introduction When engaged in auditing a public firm, such as Apollo Shoe Inc. , an auditor must determine when to trust in the company’s internal controls and when to ascertain auxiliary testing methods are obligatory to analyze control risks. The sales and collection cycle is rather a substantial fraction of the audit because this unique segment employs a multitude of documentation and records ranging anywhere from customer and sales orders, shipping documents, credit memos, and general journal entries; therefore, a…...
Internal ControlInventorySales
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Internal control for finance
Words • 797
Pages • 4
The board of directors of the Kingfisher Company takes into account the risk assessment, identification of the mitigation action and internal control that enables the company to achieve its strategic corporate objectives that are within the company’s risk or reward profile. The internal control system is regulated by the board of directors who regularly and at least annually review whether it is effective or not the activities of the organization are been carried out effectively, so as to avoid any…...
BusinessFinanceInternal Control
Goodner Brothers Audit Case
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Pages • 5
The Goodner Brothers, Inc. audit case is based off the story of two men who have been friends since their childhood: Woody Robinson and Al Hunt. Now as adults, Mr. Hunt works for an auto supply store while Mr. Robinson works for Goodner Brothers, Inc. , a tire wholesaler in Huntington, West Virginia. In the Goodner case, internal auditors were conducting their annual inventory counts of Goodner Brothers, Inc. and determined that their numbers were lower than the book inventory…...
AuditBusinessInternal Control
Business Process Improvement
Words • 2195
Pages • 9
Introduction Technology is noted under various frameworks for analyzing the effect of the macro environment on the specific strategies that are adopted by businesses as one of the key variables affecting business operations. Technology has generally revolutionized how businesses view their internal strategies and the specific strategies that they employ in improving their internal capabilities (Kaltoft, Boer, Chapman, Gertsen, &Nielsen, 2006). Business process improvement initiative which focuses on improving strategies that are used in controlling and organizing processes within organizations…...
BusinessInternal ControlRisk Management
Enterprise Risk Management
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Pages • 4
Enterprise Risk Management (ERM) is only as effective as the amount to which the methodology has been adopted holistically by a business. The adoption of risk management throughout a business becomes increasingly difficult as the a business grows and becomes more complex. It is clear that Unilever is a complex business with global operations, this necessitates a potent and successful risk management presence within the company. A key strength of Unilever's approach to risk manangement processes is the level at…...
AuditBusinessInternal ControlRisk Management
Mr Mrs Landscaping I would like to discuss your company’s internal
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Pages • 3
Mr. & Mrs. Landscaping I would like to discuss your company's internal controls. With the new program your company has purchased, I would suggest updating the controls you have in place to incorporate the new accounting system. There are some internal control procedures in accounting I would like to discuss with you. I have included in this memo some information you need to know to keep your procedures flowing correctly.The reason I recommend updating your procedures is because of the…...
AccountingBankBusinessCompanyFinanceInternal Control
Internal Control System of Organization and Performing Services
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Pages • 10
The agency theory explains the existence of mechanism in resolving problems that exist in principal-agent relationships. Internal controls are predominantly operational tools institutions make use of in addressing the principal-agency problem (Jensen and Payne, 2003). The tools and organs used in addressing agency issues include audit committees, external auditing, financial reporting, and budgeting. But studies have shown that agency costs can be reduced by effective internal controls (see; Abdel-khalik 1993; Barefield et al. 1993).Agency theory suggests that the firm can…...
AuditInternal ControlOrganizationRiskService
Proficiency level in Excel and WordTo work effectively in a workplace
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5.4. Proficiency level in Excel and Word.To work effectively in a workplace you must have a proficiency level with Word and Excel. 5.5. Basic understanding of internal controls and governance. The effective implementation and monitoring of a sound internal control system helps ensure that Not for Profit entities meet their objectives, such as providing services to the community professionally, while utilising resources efficiently and minimising the risk of fraud, mismanagement or error. Good internal controls will :help align the performance…...
BusinessInternal ControlWorkplace
Business Risks of Enron
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Pages • 12
Enron faces the risk of currency instability and foreign currency risk. The business nature of Enron has led the company to be exposed to additional risks that caused pressure on corporate executives to practice aggressive financial reporting practices, and intentional material misstatement. This risk awareness eventually resulted in the company bankruptcy. Enron undertook international projects relating to construction and management of energy capacity. This increased it business risk several fold. There was a strong possibility that Enron would not have…...
AccountingAuditBusinessEnronInternal ControlStock
Business Deficiency Management
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Pages • 2
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A deficiency in design exists when (a) a control necessary to meet the control objective is missing, or (b) an existing control is not properly designed so that, even if the control operates as designed, the control objective would not…...
Business ManagementInternal ControlManagement
Goodner Brothers, Inc.
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Pages • 5
Goodner Brothers set ambitious sales goals. In order to achieve these goals, they were known to undercut their competitor’s prices. In the text, it is pointed out that “To compensate for low gross profit margin, Goner scrimped on operating expenses, including expenditures on internal control measures. ” Goodner Brothers should have not saved on internal control measures so they could have caught Woody stealing their inventory. Goodner Brother’s should have had more employees to have an appropriate check and balances…...
AuditInternal ControlMy Brother
Case Study of Howard Street Jewelers
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Pages • 4
The internal control concepts that the Levis ignored were Segregation of duties - No one person should be responsible for all transactions from the beginning to the end. Betty had too many responsibilities that were interwoven and should have been performed by more than one person. She handled the cash that came in, maintained the cash receipts and the sales records. Another concept that this relates to is that no one individual should perform more than one of the following;…...
BusinessCase StudyInternal Control
Management Control Systems at Reliance Industries Limited
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Pages • 8
Reliance Industries Limited (RIL) is world’s leading and India’s no: 1 Private Ltd. Company. RIL group is a highly diversified group and is in to multiproduct business like oil / gas exploration, retail of petro / consumer products and mfg. of petrochemical / refining and textile products. Also, in to infrastructure and transportation sectors. he Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual…...
AuditEconomyIndustryInternal ControlManagement
Leslie Fay Case
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Pages • 11
The use of financial ratios assists the auditor in analyzing any unusual deviations from the expected results, (Gupta, 2004). The financial ratios are then compared with the entity's ratios for prior periods as well as with ratios for other businesses in the same industry. A comparison with the industry ratios would have warned BDO of some irregularities in Leslie Fay's financial statements. BDO Seidman should have been interested some important ratios that would help in determining the accuracy of the…...
AuditBusinessBusiness EducationBusiness ManagementBusiness NewsEconomics
Do Auditors Need to Have in-Depth Knowledge of Information Technology
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Yes, auditors need to have in-depth knowledge of information technology. Networks and computers deliver the most information needed for auditing to work. For it to be effective, auditors have to use the computer as an auditing tool, audit automated systems and data, and understand the business purposes for the systems and the situation in which the systems operate. The other important uses for networks and computers by auditors are in audit administration. By pursuing new uses for computers and communications,…...
AuditInformation Technology In FutureInternal Control
Phar-Mor Fraud
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Pages • 8
Phar-Mor, Inc was a thriving discount grocery store in the late 1980’s. Phar-Mor was moving product quickly but profit margins were not significant enough to pay the bills. By the early 1990’s, Phar-Mor declared bankruptcy due to fraudulent financial reporting and misappropriation of assets, making it one of the largest frauds in U.S. history. Below, we will use auditing standard AU 316.85 Appendix A in conjunction with the video “How to Steal $500 million” to analyze how incentives/pressures, opportunities, and…...
AuditBusinessBusiness ManagementFinanceInternal Control
Benefits and Effectiveness of Accounting
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Pages • 9
The research was based on two variables these are computerized accounting systems which comprise of definitions, components of computerized accounting software and benefits and limitation of computerized system and financial reporting which also comprises of definitions of financial reports, benefits and effectiveness of accounting system used at National Water and Sewerage Corporation. The study will enable management to understand the significance of preparing quality and reliable financial reports. The study will point out weakness in the accounting system which management…...
AccountingAdoptionAuditInternal Control
Internal Control Over Cash
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Merchandise inventory is generally valued at the price for which the goods can be sold. reported under the classification of Property, Plant, and Equipment on the balance sheet. reported as a current asset on the balance sheet. often reported as a miscellaneous expense on the income statement. Items waiting to be used in production are considered to be finished goods. merchandise inventory. raw materials. work in progress. In a manufacturing business, inventory that is ready for sale is called store…...
ControlFinanceInternal ControlInventoryMoney
The Case Analysis of Equity Funding
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Pages • 6
The collapse of Equity Funding had a far-reaching influence on business practices and institutions. Although it happened over 30 years ago, the lessons from Equity Funding are still meaningful and constructive nowadays. Auditors of Equity Funding failed to collect sufficient evidence, check internal control and substantiate computer system. The audit premise----- understanding internal control system AUS 402.41 requires the auditor to obtain an understanding of internal control relevant to the audit. The effective internal control can provide “protection against human…...
BusinessEquityInternal Control
Internal Control
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Pages • 12
Senior executives have long sought ways to better control the enterprises they run. Internal controls are put in place to keep the company on course toward profitability goals and achievement of its mission, and to minimize surprises along the way. They enable management to deal with rapidly changing economic and competitive environments, shifting customer demands and priorities, and restructuring for future growth. Internal controls promote efficiency, reduce risk of asset loss, and help ensure the reliability of financial statements and…...
ControlInternal ControlManagement
Safety Issues in Woolworths Annual Report Analysis
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As we all know Woolworths is one of Australia's largest supermarket operators. Woolworths supermarkets are everywhere in Australia. Is no exaggeration to say that more than half of Australian’s daily life cannot be separated from Woolworths. Every day people buy a lot of goods from Woolworths, such as food and other daily necessities. Woolworths is committed to providing better goods and services to consumers. Nevertheless, the customer still needs some other protective. Therefore I think the Australia consumer law should…...
Corporate governanceFoodInternal ControlRiskSafety
Checklist For Evaluating Internal Controls in Business Management
Words • 302
Pages • 2
Paper Type:Evaluation essays
For publicly traded companies, the Sarbanes-Oxley Act of 2002 requires an audit of internal controls. The purpose of an internal control evaluation is to evaluate risk, which offers auditors a basis for audit planning and provides useful information to management ("Sox Law", 2006). Auditors typically use the five basic components of internal control to approve the entire system. According to Louwers, Ramsay, Sinason, and Strawser (2007) the five components to internal controls include control environment, risk assessment, control activities, monitoring,…...
BusinessBusiness ManagementInternal Control
First Keystone Bank
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Pages • 3
1. Prepare a list of internal control procedures that banks and other financial institutions have implemented, or should implement, for their ATM operations. Financial institutions should implemented the following internal control procedures. The first one is Risk Assessment, which means financial institutions’ management should identifies, analyzes, and manages risks that can affect the company. The second one is Control Environment, this procedure require management of the institutions attitude toward, awareness of, and actions concerning the internal control structure to in…...
BankBusinessInternal Control
Evaluating Internal Controls
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Paper Type:Evaluation essays
An organization’s internal controls are comprised of five components, which include: the control environment, risk assessment, control activities, monitoring, and information and communication. The five components of internal control are considered to be criteria for evaluating an organization’s financial reporting controls and the bases for auditors’ assessment of control risk as it relates to an organization’s financial statements (Lowers, et. al., 2007). “Thus, auditors must consider the five components in terms of (1) understanding a client’s financial reporting controls and…...
BusinessControlInternal Control
Control Mechanisms: The Walt Disney Company
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Pages • 6
Introduction Organizations use control mechanisms to help regulate guidelines and procedures which contribute toward effectively achieving organizational goals. The Walt Disney Company is a well known entertainment organization that has become tremendously successful both nationally and internationally over the past 70 years or so partly through successful implementation of control mechanisms throughout every aspect of the organization. The purpose of this paper is to explore four types of control mechanisms used by the Walt Disney Company: (1) budgetary, (2) financial,…...
BusinessInternal Control
Flight Of Fund Business Management
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INTRODUCTION In 2010, Mr. Idris was hired as the Chief Operation Executive (CEO) of Travel Investment Holdings Berhad (TIH), a government linked company (GLC) in logistics and travel related business. The first task as the CEO of TIH was to identify solutions to recover the losses of the company due to the economic crisis in 2009. In order to diagnosis the problem, Mr. Idris called for a meeting among senior managements. He found out that there was no-result investment made…...
Business ManagementFinancial StatementInternal ControlInvestment
Howard Street Jewelers Case Study
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Pages • 3
1. The Levis overlooked several internal control concepts that could have prevented Betty’s embezzlement from the company. • Segregation of duties: Betty had responsibilities in too many areas. She maintained the cash, the cash receipts, and the sales records for Howard Street Jewelers. This not only provided Betty with plenty of opportunity, but also gave her the means to conceal the theft. • Authorization of transactions: Betty was able to put items on layaway without authorization from management. • Physical…...
BusinessCase StudyInternal Control
Feet case study
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Pages • 6
The item that seemed to really call my attention as being a problem is some of the profitability ratios. Starting with the Gross Profit margin, it seems at the moment that Just Feet makes $41.62 in 1999 and in 1998 $41.53 in profit, but it cost the company more to produce than what they are making in profit. This shows that they need to lower their costs in making their product to be more profitable. The company has not even…...
Case StudyInternal Control
Biovail Case Study
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Pages • 13
Biovail Corporation, a major Canadian pharmaceutical company listed on the New York Stock Exchange, announces that it will miss its quarterly earnings target by $25 to $45 million, blaming $10 to $15 million of the shortfall on a truck accident involving a shipment that left its facility on the last day of the quarter. The case was ultimately prosecuted by the U.S. Securities and Exchange Commission (SEC). The case is centered on the question of revenue recognition and how the…...
BusinessCase StudyInternal ControlRevenue recognitionTruck
Evaluation of Comptronix Corporation: Identifying Inherent Risk and Control Risk Factors
Words • 2577
Pages • 11
Paper Type:Evaluation essays
1. Professional auditing standards present the audit risk model, which is used to determine the nature, timing, and extent of audit procedures. Describe the components of the model and discuss how changes in each component affect the auditor’s need for evidence. The audit risk model is used to determine the nature, timing, and extent of substantive audit procedures. The components of audit risk model usually stated as follows: DR = AR/(IR x CR) Where: DR = detection risk; AR =…...
AuditCorporationFinancial StatementInternal Control
Audit failure
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Pages • 5
AUDIT FAILURE OF WORLDCOM Group 1 Background • WorldCom, first named LDDS (Long Distance Discount Services), grew largely by aggressively acquiring other telecommunications companies in 1990s. • For a time, it was the United State's second largest long distance phone company (after AT&T). Background However, the year 2002 comes… • In March, the SEC began to investigate WorldCom as it reported large profit while AT&T reported loss. • In May, Arthur Anderson was replaced by KPMG as the audit of WorldCom. Background • In June, a small team…...
AuditFailureInternal Control
Improvement of Internal Control Weaknes
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Pages • 2
In Improving weakneses on the internal control PCI Sdn Bhd should develop more comprehensive Standard of Procedure on preparing Purchase transaction also the accounting preparer role treatment. Refer to the first problem occur where planning section should not easily give MMR to En.Razi without any proper authorization, there should be the MMR must be authorized by their head department first before sent to En. Razi to recheck the exactly amount and sent to his manager to double check it and…...
ControlImproveInternal Control
The Golden Bear after Initial Public Offer
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Pages • 15
Introduction This paper discusses the Golden Bear Golf Inc after Initial Public Offer in 1991, highlighting the accounting practices and methods were used in recognizing the company’s revenue. This paper explains the fraud occurred in recognizing the revenue and how it overstated the financial statements and increased the stock price. It also explains the fraud theory applied to the revenue recognition and the auditor’s failure in discovering the fraud and reports it to the SEC. This paper will provide methods…...
AccountingArchitectureAuditConstructionContractInternal Control
Risk Review: MacVille Ltd
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Pages • 8
Scenario As part of their overall strategy in the Australian beverage market, MacVille Pty Ltd have developed a chain of cafes in the Central Business District (CBD) of Brisbane, Queensland and the CBD of Sydney, NSW. The board of directors have made the decision to expand their operations in Queensland with the purchase and re-branding of the existing Hurley’s cafe in Toowoomba, 130km west of Brisbane. You are currently the assistant manager of their flagship store in Queen Street, Brisbane,…...
Internal ControlRiskRisk Management
Unethical Practices and Behavior in Accounting
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The Sarbanes-Oxley Act of 2002 (SOX) was developed to prevent deceptive financial activities, and to provide financiers with more accurate monetary resources on corporations. Under SOX, companies are held responsible if they fail to keep the requirements that were set forth in the act. The act requires business to maintain acceptable internal control measures, provide responsible monetary reports, disclose regular reports, and establish rules for yearly reporting. (Hazels, 2010) These requirements are all part of the Typically Accepted Accounting Principles…...
AccountingAuditBehaviorEthicsFinancial StatementInternal Control
Accounting Information Systems Research Paper
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Pages • 13
Abstract The Sarbanes-Oxley Act of 2002 (SOX) was enacted into law in 2002 in the wake of corporation financial reporting scandals involving large publicly held companies. SOX instituted new strict financial regulations with the intent of improving accounting practices and protecting investors from corporate misconduct. SOX requires corporate executives to vouch for the accuracy of financial statements, and to institute and monitor effective internal controls over financial reporting. The cost of implementing an effective internal control structure are onerous, and…...
AccountingAuditInformation SystemsInternal Control
Internal Control Procedures in Accounting
Words • 1670
Pages • 7
Culotti’s Pizza operates strictly on a carryout basis. Customers pick up their orders at a counter where a clerk exchanges the pizza for cash. While at the counter, the customers can see other employees making the pizzas and the large ovens in which the pizzas are baked. Instructions: Identify the six principles of internal control and give and example of each principle that you might observe when picking up your pizza. (Note: It may not be possible to observe all…...
AccountingInternal Control
Ethical decision making for Procter And Gamble
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Pages • 12
Procter & & Gamble (PG) is a global financier, a business that is constantly on top of marketing and enhancing its trademark name as being at the top of the pack. One example of how the company has used social media to strengthen its brand and then offer a short-term income play. The creativity in marketing today can be incredible when one uses social networking in combination with brand name awareness. And this type of quick thinking and awareness can…...
AuditDecision MakingEthicsInternal Control
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