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Literature Review on Internal Control Internal control in organisation

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Added on  2020-07-22

Literature Review on Internal Control Internal control in organisation

   Added on 2020-07-22

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CRITICAL REVIEW
Literature Review on Internal Control Internal control in organisation_1
Table of ContentsINTRODUCTION...........................................................................................................................1Literature Review on Internal Control .......................................................................................1COSO framework and ISA 315..................................................................................................2Limitations of Internal control ...................................................................................................2CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
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INTRODUCTIONInternal control in organisations comprise accounting and auditing which assist theindividual organisational growth in order to attain goals and objectives. Internal control isstrictly monitored by the management in improve the efficiency and reliability of financialreporting, policies and regulations. The report will critically evaluate ideas and informationabout the objectives and importance of internal control in company. Thus, the report willanalyse the idea over integrity in management, division of duties, maintenance of record,competent personnel and many more factors which are concerned with the internal monitoringand control.Literature Review on Internal Control Internal control in organisation plays vital role in establishing effectiveness andefficiency in micro business operations. According to Chen, Chan and Zhang, 2017, is thestrategy which assist the firm in evaluating the need of changes which can be related toemployees, manage functions, departmental operations, or finance reporting. It is the besttechnique which reduce the chance of uncertainty in entity. However, in contrary the control onmicro factors sometimes leads to wrong evaluation of situation. In contrast, as per the views of(Vovchenko, Holina and Sichev, 2017), the ultimate objective to establishing internal control inorganisation is to manage risk and treats which can hinder the business performance. Further, itis the best way of improving working efficiency and effectiveness of organisational functions.Apparently, the best method used by the firm to monitor and control internal functioning isSWOT analysis which assist the management in determining internal strengths and weaknesswhich can resists the market changes. It is evaluated by the enterprise to determine individualefforts in organisational functioning. Therefore, it has been evaluated that the internalfunctioning is interrelated to management structure which assist the directors in overseeing theview which demonstrate a critical view of employee interpreting, financial reporting, division ofduties etc. In addition to this, Katmon and Al Farooque, 2017 has stated that internal auditing isthe method used by business to control functions, evaluate employee performance make effectivedecisions and calculate the risk involved in process. Apart from this, the internal control is thebest way which assist the enterprise in establishing strict control over the functions andemployees activities. Further, according to Yee, Sujan and Leung, 2017, there are varioussituation which the actual profits and loss are hidden from the management but the strict control1
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