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Evaluating accounting control systems - Essay Example

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Evaluating accounting control systems

The meaning of internal control has changed over the recent years with the development of various internal control models. The COCO model is one of those models. Stone Creek Church in Urbana, Illinois has adopted the COCO framework model for their Internal accounting control system. The Coco model, which builds on COSO (another internal account control model) is the most user-friendly and concrete method. “The COSO framework is the reference model, which is written from the point of view that basically it makes the organizational member of the internal control be thorough who includes the manager from the standpoint of the shareholder” (COSO Framework Para 10).       The COSO framework describes internal control as a procedure, influenced by an entity’s management, board of directors and other workers, which is planned to provide reasonable assurance concerning the attainment of objectives. As stated the earlier Stone Creek Church in Urbana, Illinois has used the COCO framework model. The Stone Creek Church in Urbana always has to in excess of two persons to handle the cash. The money is never in one person’s situation anytime for protection. ...
And it protects the person and the structure. The Stone Creek Church in Urbana provides cash dispersement process. It means payment or Cash outflow of money to resolve commitments for instance interest payments for loans, operating expenses and accounts receivables throughout a particular period so as to carry out business actions. Usually in the form of plastic money, cash, check, Electronic fund transfers and warrants. CoCo model distinguishes four interconnected elements of internal control such as containing purpose, commitment, capability and learning and monitoring. An industry that performs a task is directed by an understanding of the function of the task and supported by ability. To execute the task well over time, the industry wants a sense of commitment. At last, the industry has to monitor task performance to develop the task process. These fundamentals of control, which contain twenty particular control criteria, are seen as the steps an industry takes to promote the right action. As mentioned earlier Stone Creek Church in Urbana, Illinois has adopted the COCO framework model. The task was to evaluate the accounting control systems of Stone Creek Church in Urbana, Illinois on the basis of the interview of the Stone Creek manager and the attached notes on COCO framework. The Coco framework states that the organizations should be able to measure their performance in quantitative terms and should use budgets and financial statements to evaluate their performance. The Coco framework also advocates the use of qualitative measures such as target setting in order to assist the performance of a firm. In the Stone Creek Church case no quantitative measures like the setting up of budgets has been done as well as no qualitative measures like ...Show more

Summary

Finance and Accounting November 27, 2011 Evaluating Accounting Control Systems  Introduction: The COCO framework is one of the models of internal accounting control, which is used by many firms to maintain accurate financial reports…
Author : lebert
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