Essay on Internal Control
Added on -2020-07-23
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Internal Control -Assessment 2
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1A Ascertaining the breach of internal control.............................................................................1B Modification of such procedures.............................................................................................2CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4
INTRODUCTIONTo ascertaining the business needs and having the appropriate operational practices therewill be need of implementing the adequate policies and procedure. It includes rules, regulationand framework of the business performance. Therefore, such techniques will be known as theinternal control program of the entity. In the present report there has been examination of thevarious components of the internal control and the techniques to control the breach suchactivities. The report will also highlight framework of internal control as to safeguard assets,facilitate the reliable financial data and make better internal control.A Ascertaining the breach of internal controlIn the present scenario there has been breach of internal control was made over thecarelessness by the auditors on the first attempt. Thus, it was necessary for them to keep therecords of all the transactions in appropriate manner and they must be responsible for analysingthe transactional variations in the firm. The disclosure presented by them must be accurate asthey need to have proper analysis of all the financials of the organisation such as income orexpenditures etc. On the other side, the section manager and his wife are responsible for thefinancial damages to the company. They have made their personal expenses and purchases of theinvoices which were around $500000. Thus, the analysis made by general managers inaccordance with determining the reason behind lower profit. However, these are the reasons onwhich the firm is not having profits for the period while there is continues growth in the income. There has been breach of internal control in the business by the professionals and they areresponsible for making the payment of the penalties. The revenue generated by firm is itspersonal revenue and the will be distributed among the stakeholders as per the proportionateinvestment made by them (Kravet, McVay & Weber, 2017). Thus, nobody could utilise suchamount for their personal use. However, these breaches of internal control will hugely affect theindustrial operations and damages the financial stabilities of the firm. There are five componentsof the internal control program such as:Control Environment: This is initial level of internal control system which has beenfacilitated by the banks to the corporation. It includes the adequate control over the internalsystem of the organisation. It will be helpful in terms of preventing the business from variousmajor issues such as:1
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