Implement and Maintain Internal Control Procedures

This management report discusses the implementation and maintenance of internal control procedures. It covers the tasks for CFO, development of control procedures, plan for implementation, and internal management report.

Running Head: IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
Name of the Student
Name of the University
Author Note

1IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Table of Contents
Assessment 3..............................................................................................................................2
Control Procedures and Management Report............................................................................2
Task for CFO and relevant reports.........................................................................................2
Development of the Internal Control Procedures...................................................................2
Plan for procedures’ implementation.....................................................................................3
Internal Management Report..................................................................................................4
Email......................................................................................................................................5
Meeting with CEO.................................................................................................................5
Revised Internal Control Reports...........................................................................................6
Email......................................................................................................................................7
Reference....................................................................................................................................9

2IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Assessment 3
Control Procedures and Management Report
Task for CFO and relevant reports
The list of task that the newly appointed CFO would be responsible for, that includes
the relevant reports that have to be accessed and reviewed as well as schedule for this are as
follows:
 Invoices of the company seek prior approval for the purchases from management. The
report required for this is purchase or expense reports.
 Payment of the correct pay rate by the payroll officer tothe staff members because the
payroll officer has processed the payment that was based on thecontract of the
employment. The report required for this is payout or payroll report.
 Regularly review of the reports of profit and loss and cash flow. The report required
for this is financial reports or accounting reports.
 Approval for the delegation of the role. The report required for this is delegation for
approval reports.
 Apart from this, CFO has the responsibilities for high-level approval as well as
assisting for controlling the operations of business. He will be delegated person, who
will be responsible for queries, purchases and monitoring (Balsam, Jiang and Lu
2014).
Development of the Internal Control Procedures
For resolving, the issues regarding unapproved purchases and payroll processing,
following internal control procedures can be developed as used by other companies:

3IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Unapproved Purchases: For determining the internal controls over the purchases and
payments that is line with and is effective, the Summerland Key, FL, Post office relied on the
data generated from the computer from the Fedlmage system of Federal Reserve Bank and
Enterprise Data Warehouse. However, they do not test the validity of the control system; they
accessed the data accuracy by reviewing the internal controls, selecting the traced
information for supporting the records from the source of Fedlmage system as well as
conducting interview with the knowledgeable personnel of Postal Service. Hence, with the
help of this, they determined that the data were reliable sufficiently with the report purposes
(Uspsoig.gov. 2019).
Payroll Processing: The Patroit software uses the online payroll software that is the part of
the payroll internal controls. Secure servers, encryption and firewalls secure the information
of the payroll. The company also guarantees for the calculating accurately. Hence, there is no
chance for the mathematical errors (DeWitt 2016).
Hence, it has been find from the research that, these companies uses the similar
processes as according to the mentioned guidelines and recognized practices.
Plan for procedures’ implementation
For plan for the implementations of the procedures includes establishment of the
appropriate control environment, assessing risk, implementing control activities,
communicating information as well as monitoring the control activities. The relevant
stakeholders are internal stakeholders that includeemployees; board of directors and
managers as well as external stakeholders includes regulators, suppliers, consumers and
investors (Alles et al. 2018). The arrangement of the consultations with the stakeholders can
be done byenabling the system of information as well as communication system that helps in
exchange of the information that is required for conducting, managing and controlling the

4IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
operations.The proposed timeframes for the proposed implementation includes scheduled
monitoring on the regular basis.Three performance indicators for evaluating future
compliance to each of the procedures are efficiency and effectiveness of the operations of the
company, reliability on the part of financial reporting and compliance with the applicable
laws and the regulations.The timetable for reviewing the ongoing success of the procedures
should be periodically (Alzeban and Gwilliam 2014).
Internal Management Report
Issues and Causes: The issues include no prior approval for purchase from management,
incorrect pay rate, not reviewing the financial report regularly and non-clarity of delegation
of role. It is due to less internal control by the organization (Abbott et al. 2016).
Review of the similar processes by other companies: Summerland Key, FL, Post office and
The Patroit software have used the procedures of internal control in line with the recognized
practices.
Support from relevant research: The research from the two companies regarding
unapproved purchases and payroll processing supports the relevant research and can be
helpful in implementing in this organization (Maas, Schaltegger and Crutzen 2016).
Procedural information: The procedural information can be accessed from the development
of the control procedures.
Implementations and review timetables: The implemented of the control measures should
be reviewed periodically at regular time interval.
People responsible for implementation: CFO will be responsible for the implementations.
Implementation of changes: The changes are implemented because of the prevailing issues
of lack of internal control.

5IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Three performance indicators: It includes company’s operations efficiency and
effectiveness of company’s operations, reliabilityof financial reporting and compliance with
laws and the regulations.
Assessment of the ongoing success: The organization will experience success by
implementing these control procedures (Feng et al. 2014).
3)
Email
Dear Sir,
This is to inform you that, I am attaching the control procedures and management report that,
contains the information on the issues and causes, review of similar processes by other
companies, procedural information and support from relevant research. In addition, this
report includes other information such as implementations and review timetables, people
responsible for implementation, implementation of changes, three performance indicators and
assessment of the ongoing success.
Hence, I request you to provide me the date, place and time for more discussion on this
matter.
I would be grateful to you for this.
Kind Regards.
Accountant
4)
Meeting with CEO
Accountant: Hello Sir,

6IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
CEO: Hi
Accountant: Sir, this is to inform about the issues pertaining in the organization. The control
procedure is required because the ongoing process is effecting the business operation due to
lack of internal control. The procedures will be able to reduce the risk of the company and
enforces better control the finances by implementation of the proposed plan of internal
control. The periodically and timely implementation of the reports will be helpful for
managing the maximum benefits for the all the parties involved in the processes. Hence, these
are the, which can be managed by the above steps. Therefore, I request you that, if you want
to give any feedback, please provide it.
CEO- I think the changes should be done in the processes of the internal control is that, the
process of internal control is good, but the CFO should also give the authority to the
departmental head for preparing the report without material error and to review the
performance of the reports before presenting it to me.
5)
Revised Internal Control Reports
Issues and Causes: The issues include no prior approval for purchase from management,
incorrect pay rate, not reviewing the financial report regularly and non-clarity of delegation
of role. It is due to less internal control by the organization.
Review of the similar processes by other companies: Summerland Key, FL, Post office and
The Patroit software have used the procedures of internal control in line with the recognized
practices.
Support from relevant research: The research from the two companies regarding
unapproved purchases and payroll processing supports the relevant research and can be
helpful in implementing in this organization.

7IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Procedural information: The procedural information can be accessed from the development
of the control procedures.
Implementations and review timetables: The implemented of the control measures should
be reviewed periodically at regular time interval.
People responsible for implementation: CFO will be responsible for the implementations.
Implementation of changes: The changes are implemented because of the prevailing issues
of lack of internal control.
Three performance indicators: It includes company’s operations efficiency and
effectiveness of company’s operations, reliability of financial reporting and compliance with
laws and the regulations.
Assessment of the ongoing success: The assessment of the success can be done by reviewing
the relevant reports first by the concerned department and then by the CFO.
6)
Email
Dear Sir,
I have attached the Revised Internal Control Report in this mail, which consists of
information on the issues and causes, review of similar processes by other companies,
procedural information and support from relevant research. In addition, other information
includes implementations and review timetables, people responsible for implementation,
implementation of changes, three performance indicators and changed assessment of the
ongoing success as per the discussion.
Hence, I request you to approve the project for proceeding further for the implementations. I
would be grateful to you for this.

8IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Kind Regards
Accountant

9IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Reference
Abbott, L.J., Daugherty, B., Parker, S. and Peters, G.F., 2016. Internal audit quality and
financial reporting quality: The joint importance of independence and competence. Journal of
Accounting Research, 54(1), pp.3-40.
Alles, M., Brennan, G., Kogan, A. and Vasarhelyi, M.A., 2018. Continuous monitoring of
business process controls: A pilot implementation of a continuous auditing system at
Siemens. In Continuous Auditing: Theory and Application (pp. 219-246). Emerald Publishing
Limited.
Alzeban, A. and Gwilliam, D., 2014. Factors affecting the internal audit effectiveness: A
survey of the Saudi public sector. Journal of International Accounting, Auditing and
Taxation, 23(2), pp.74-86.
Balsam, S., Jiang, W. and Lu, B., 2014. Equity incentives and internal control
weaknesses. Contemporary Accounting Research, 31(1), pp.178-201.
DeWitt, K. (2016). Payroll Internal Controls | Best Practices. [online] Payroll Tips, Training,
and News. Available at: https://www.patriotsoftware.com/payroll/training/blog/payroll-
internal-controls/ [Accessed 24 Apr. 2019].
Feng, M., Li, C., McVay, S.E. and Skaife, H., 2014. Does ineffective internal control over
financial reporting affect a firm's operations? Evidence from firms' inventory
management. The Accounting Review, 90(2), pp.529-557.
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability
assessment, management accounting, control, and reporting. Journal of Cleaner
Production, 136, pp.237-248.

10IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDUES
Uspsoig.gov.(2019). [online] Available at:
https://www.uspsoig.gov/sites/default/files/document-library-files/2018/FCS-FM-18-004.pdf
[Accessed 24 Apr. 2019].