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Justification for an Internal Control System
Finance & Accounting
Pages 3 (753 words)
Justification for an Internal Control System Name Tutor Institution Subject Code Date of Submission Introduction Internal control systems are processes produced by an organizational structure, authority and work hierarchy meant to help an enterprise achieve specific objectives…
If the organization already has controls in place with the insurance and portfolio approach, the controller has chosen to develop a system to enable determination of intended operations within the organization. The system chosen focuses on the function of inventory management. At present, the company has an insurance policy that covers theft from both employees and outsiders. This system will evaluate the effectiveness of inventory management processes with the objective of facilitating a reduction in insurance premiums to the company. It will, therefore, complement the existing policy on insurance, while at the same time saving the company money. The proposed system Receiving goods The system recommends that the stores department receives the good that the company purchases. It also recommends that suppliers invoice on delivery and provide delivery notes, lest the stores department declines to accept the goods. Additionally, the stores attendant in conjunction with the company security do the verification that the goods that the delivery invoiced are the ones it delivered. The finance department is to carry out occasional random spot checks to verify the case. The stores department then books the goods into the information system. ...
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