CGA course materials. Explain the control objectives and test of controls procedures for the acquisition and expenditure cycle. Updated to the 2009/10. web. http://www.cga-education.org/2009-10/PAP/modsums/au1/m08summary.htm 13
This paper attempts to analyze and evaluate the…
There also remains the question of assessing the adequacy of the policies and procedures, and determine whether these are being implemented, working efficiently and being monitored effectively. The paper will further discuss the strengths and weaknesses in the internal control system of purchases, payables and payments.
Management is responsible to ensure that proper internal controls are being exercised and being operated as intended. We believe that this information will alert to possible weaknesses in our organization and enable the management to initiate appropriate actions to address the concerns.
The text book defines internal auditing as an independent, objective assurance and consulting activity designed to add value and improve an organizations operations. It helps an organization to accomplish its objectives by evolving a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
The internal audit activity evaluates the adequacy and effectiveness of controls that encompass the organizations governance, operations, and information systems. Internal audit reviews include the reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets, and compliance with laws, regulations, and contracts. These reviews also ascertain the extent to which operating and program goals and objectives have been established and whether they conform to the requirements of the organization. Besides, it also examines the extent to which results are consistent with established goals and objectives and whether operations and programs are being implemented or performed as intended.
This paper will also strive to help in improving the functions of internal controls in purchase, payable and payment first by describing the existing ...
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This is because the checks issued are not pre-numbered as a result, there is no preferable order on how the treasurer or the purchasing agent issues the checks thus, no one can be held responsible for any check loss. In addition, the checks are not safe because they are kept in an unlocked file cabinet (Kimmel, Weygandt & Kieso, 2011).
Two of the primary goals of internal controls are safeguarding the assets of a company and to prevent against fraud. Three of the main components of an internal control system are the control environment, control procedures, and the accounting system. Some factors that may influence the control environment are regulations, personal policies, and monitoring of responsibilities.
Data from remote factories and branches is going to be transmitted to the server through the British Telecom telephone system. By connecting oneself to the internet, an individual is opening himself to attacks on his computer and unauthorized access to his computer from people on the internet or others from within the company.
The case of the World Bank shows that internal control failures result in organization and stakeholder losses, have a negative impact on the image of the organization, its cash management and budgeting.
One of the biggest and most powerful financial organizations, the World Bank, failed to control funding of large-scale hydropower projects.
Aside from examining the viability of these existing controls, this paper will discuss the strengths and weaknesses of the procedures adopted by the company. Furthermore, it intends to recommend an enhancement in the control system of purchases, payables and payments to address the weaknesses in internal control.
Internal control main function is to minimize or eliminate fraud or error in the preparation of financial statements mainly divided into administrative controls and accounting controls by setting accounting and operational procedures that eliminate or minimize fraud or error.
Duties should be segregated so that the purchasing agent should only be given the responsibility to approve arrival of goods. Payment and record keeping should be done by the treasurer. Secondly, the company should purchase a new
e biggest problems that was identified in the Enron scandal was the lack of internal controls to prevent shady executives from stealing money from corporations. As a direct consequence the Sarbanes-Oxley Act created section 404 of the Act which dealt directly with the internal
In evaluating the internal control over cash payments of Yankee Manufacturing, an auditor learns that the purchasing agent is responsible for purchasing diamonds for use in the company’s manufacturing process, approving the invoices for payment, and signing the checks. No supervisor reviews the purchasing agent’s work.
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