Internal Controls - Assignment Example

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Internal Controls

Cash is the most important asset of a company due the fact it can be used to pay for the purchases, payroll, and debt obligation of a firm (Deloitte). In the past I have been exposed to internal controls in the workplace. The section below discusses four experiences of mine with internal controls in the workplace. Example #1 A few years ago I worked for a company that had just been opened. The firm operated in a niche industry. I was selected during the first round of recruiting. The company promised its employees a $6 productivity bonus if the employees surpassed the daily production quota. A few months passed by and the bonus was never paid. The employee got angry and started to rebel against the firm. The absenteeism rate of the company increased. The human resource department implemented a new internal control to obtain real time data over the attendance of its employees. An electronic system was installed that would record the exact time the employee arrived, lunchtime breaks, and the employees exit. The employees were given a code of four digits that they would enter in the machine. The new internal control system backfired. The employees began to cheat by giving their secret number to another employee so that they would punch in for them. Sometimes the employees never went to work and got paid by letting somebody else enter their secret attendance code. ...Show more

Summary

It is important for companies to safeguard the assets and inventory of the firm. Business owners and managers have to protect themselves against internal and external threats. The employees of the company posed an internal threat to the company (Goulding, 2011)…
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