Internal Control Measures, Financial Legislation and Reporting

This report delves into the critical aspects of internal control measures within an organization. It examines how internal controls contribute to good corporate governance, emphasizing the roles of directors, shareholders, and stakeholders in maintaining a robust ethical environment. The report analyzes effective internal control measures, particularly in the context of a company experiencing rapid growth and potential financial fraud. It highlights the importance of maintaining confidentiality through various measures, including non-disclosure agreements and adherence to ethical codes. The report further explains key features of financial legislation related to transactions and reporting requirements, emphasizing the importance of tax risk management and internal control frameworks. It also details the key requirements of policies and procedures for maintaining internal control measures, including the roles of the board of directors and management. The report concludes with a discussion of effective financial delegation and its impact on organizational performance.

Running head: INTERNAL CONTROL MEASURES
Internal Control Measures
Name of the Student
Name of the University
Author Note

1INTERNAL CONTROL MEASURES
Table of Contents
Table of Contents.............................................................................................................................1
ASSESSMENT 2.............................................................................................................................3
Internal Control and how does it help in the organization...........................................................3
Internal control measures effective for the above case....................................................................4
Internal control measures in maintaining of confidentiality........................................................5
Explain the key features of financial legislation relating to above transactions and reporting
requirements................................................................................................................................6
Key requirements of policy and procedures regarding procedures to maintain internal control
measures as per the above case:...................................................................................................8
Internal Control................................................................................................................................8
Key requirements regarding internal control measures...............................................................9
Effective financial delegation..................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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ASSESSMENT 2
Internal Control and how does it help in the organization
Internal control measures is a set of laws, guidelines and procedures used inside the
office in order to maintain a good corporate culture in the organization so that the company is
able to meet up with the entire requirement. It is able to grow a good relationship between the
company and the stakeholders thereby maintaining a long-term sustainable relationship.
The directors, the Chartered secretary and the managers are able to achieve the good
corporate balance and culture by following certain rules within the organization. Good corporate
governance and control measures helps in the improvement of the organization growth and gives
a high integrity and standard.
The factors, which contribute to the good internal control, are as follows:
The directors- The directors plays a vital role in the improvement of the organization and the
overall growth and the directors are the decision makers and whatever decision they take depend
the overall growth and success of the organization (Baumann-Pauly, 2013).
The shareholders of the company- Shareholders play a vital role in the growth of the
organization, since they contribute to the capital of the organization. They are considered to be
the primary owners of the organization, since they contribution money in the organization. In
return, of the capital contributed by them they expect huge dividends from the company.

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Stakeholders of the company: The stakeholders or shareholders are the lenders of finance, the
government organization. The Stock exchange and the financial institution, the employees the
suppliers of raw materials and the lenders and the people at large, from whom the company is
also dependent
The community: The whole community, the society help in the upliftment of the company.
The system of internal control measures are set of laws by which the organization is
directed. It is a set of procedures and regulations by which the company can balance the interest
of all the contributors and the people related to the company. They are the suppliers,
shareholders, lenders, customers, the financial institution, and all the people (Cappelli, Moore
and Trzeciak ,2012).
Internal control measures effective for the above case
It states the regulation for the companies, which the companies have to abide by which
will help in the proper management of the organization. The board includes the Chief executive
officer, managing director, chief financial officer, or a company secretary or a chartered
accountant who will be appointed in the company and who will run the organization according to
the laws mentioned in the organization (Crane and Matten, 2016).It ensures that the risk of the
board and the responsibility that the company can comply with those regulations and the board
shall comply with all the laws. It ensures that the board gets the information, which will enable
them to do their work efficiently and effectively. It enables to communicate thus it ensures
proper flow of information and is able to communicate with all the stakeholders (Council, 2012).

5INTERNAL CONTROL MEASURES
In the above case “How to do it” is a company, it provides for the products to the DIY. In
the recent times their turnover has increased from $ 3million to $ 15million.There is also
increase in the number of employees in the company. Audits are conducted and they were part of
the team. The auditor told the manager that the increase in sales did not subsequently increase
the profit. After thorough investigation it was found out that the profit should have been much
higher.
It was found out that the section manager was who was responsible for the purchases and
his wife was responsible for the invoices. The section manager were responsible for authorizing
payments and his wife was responsible for issuing cheque.Therefore the audit team have
undertaken the investigation and found out after the investigation that there were some fraud in
the financials of the company and measures shall be taken to prevent the fraud and thus internal
control measures taken by the auditor is very vital for the company since it gives atrue and fair
view of the financial of the company.
The auditor is independent person and the statement given by him predicts true,
transparent and fair review of the company and helps the company to have correct financials.
Internal control measures in maintaining of confidentiality
The ASHA Code of ethics (2010) talks about the ethical and the confidentiality that is
maintained which relates to the information of the clients and the people. The ways corporate
governance helps in maintaining for better compliance and confidentiality to maintain the files

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(Epstein and Buhovac, 2014).The Chartered Accountant is appointed to comply with
management of document and files. The following are the task in this regard:
1. Separate files are maintained regarding employees and the
2. All information shall be physically and electronically maintained in a statutory registrar
within a stipulated time (Harris et al., 2013).
3. All information shall be disposed of properly to the required person
4. The company enters into a nondisclosure agreement with the employees so that there is
maintenance of confidentiality of all the information
5. Corporate governance adheres to the proper internal control procedures, accurate
financial procedures, the financial standard, and reporting and control procedures
6. A company secretary is appointed who will be responsible for recording the meetings in
the minute and will be maintaining all the records and documents, which shall be kept
and preserved throughout the business (Horn , 2012).
7. The company secretary attends the meetings of the board, the annual meetings and
maintains the records. He check whether the company has complied the procedural
norms, regulations and thereby carries out all the responsibility of carrying out the
secretarial duties as instructed by the directors of the company (Jaatun et al., 2016).
Explain the key features of financial legislation relating to above transactions and
reporting requirements
Tax risk is that the companies are paying for entering a wrong amount of tax for income
and indirect tax. Tax risk management is a part of corporate governance. If there is a internal tax

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control framework which is a risk assessment tools that are used by the authorities. They will set
rules and guidelines for board level, which will design and have control framework for tax.
It has been developed for large institution and companies and tax consolidated
corporations. For both national and international organization in Australia. The principles that is
used to a company for tax governance and which helps in understanding of better tax
governance, which helps in the internal control, and governance. This will help in
understanding of framework of best practices and the effectiveness of internal control of the
stakeholders (Kuntz, Elenkov and Nabirukhina,2013).
A good governance to risk management in financial and tax obligation in the Country of
Australia are as follows:
 Robust day to day accounting & control mechanisms.
 Strong internal and control mechanisms.
 Independent external and internal audit committee ( Leipziger, 2015)
 Separation of role from the external auditor with tax advisor.
 The code of conduct and tax structures.
 Accountabilities in relation to tax decisions.
.  Adequate resourcing of the tax function.
 Transparency with tax officers.
 Board & senior management have a line of sight on tax risk management.

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 Responsive to changes in the environment, law etc.
 Tax is considered as part of the decision making process for major transactions.
Key requirements of policy and procedures regarding procedures to maintain internal
control measures as per the above case:
Internal Control
The board of directors ensures that there is proper maintenance and there is a proper
maintenance of the standards and ethical practice of internal control and code of conduct for all
the people working and the employees and staffs of the group (Pache and Santos,2013). The
group, which is formed and is required to maintain the code of ethics and policies under which
the management the chartered accountant or the directors are expected to do the following:
1. To act honestly within the organization and to maintain good faith towards the employees
of the organization
2. To exercise proper care towards the work and maintain due diligence so that the officers
are able maintain the function and responsibility towards the office (Scott, and
Davis,2015)
3. To comply and abode by the legislation
4. The directors and the auditors are obliged so that they are able to provide the proper
information and make independent decision to satisfy the customers and the people so
that steps are taken to satisfy and maintain the sound decision made by them so that they
are true, fair and reasonable

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5. The management will encourage the reporting and investigating of unlawful and
unethical behavior
6. To comply with the share trading rules outlined in their respective Codes of Conduct
Key requirements regarding internal control measures
Effective financial delegation
A good and effective corporate regulation focuses on the formulation of the goal setting
and strategies shall be formulated so that the management is able to attain the required objectives
for improvement of the organization
Good financial delegation and it accounts for the following:
 It delegates the authority between the people
 It gives accountability for the work (Scrimgeour and Duppati, 2014).
 It distribute between the internal and external decision making power
 Delegation of the work for collecting of data and distributing it to the management.
Ensures the CEO have delegated the work to the management and the team
 Ensures that the board has enough powers so that the structures of the organization are
maintained.
 It ensures decision making power so that the people are able to take proper decision and
helps in formulating them

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Conclusion
It will thus evaluate the performance for the executive officer and throw opportunities to
the board to run his organization efficiently. It improves the skill, competencies required for the
people to the task. There is a policy and training programs, which will help in the improvement
of the board and help at the board to perform better (Devereaux and Gottlieb, 2012)
It is vital that the board understand the shareholders rights towards the company as well,
the responsibility to contribute to the company during bad times. Secondly, it is important that
the company understands that the information provided to them are all relevant. Any fraud
should be reported to the management and any king of information shall not be leaked. It ensures
that proper flow of information between the organizations (Kerzner, 2013).

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References
Baumann-Pauly, D., Wickert, C., Spence, L. J., and Scherer, A. G. (2013). Organizing corporate
social responsibility in small and large firms: Size matters. Journal of Business Ethics, 115(4),
693-705.
Cappelli, D. M., Moore, A. P., and Trzeciak, R. F. (2012). The CERT guide to insider threats:
how to prevent, detect, and respond to information technology crimes (Theft, Sabotage, Fraud).
Addison-Wesley.
Council, F. R. (2012). The UK corporate governance code. London, September.
Crane, A., and Matten, D. (2016). Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Devereaux, R. L., and Gottlieb, M. C. (2012). Record keeping in the cloud: Ethical
considerations. Professional Psychology: Research and Practice, 43(6), 627.
Epstein, M. J., and Buhovac, A. R. (2014). Making sustainability work: Best practices in
managing and measuring corporate social, environmental, and economic impacts. Berrett-
Koehler Publishers.
Harris, S. R., Cartwright, E. J., Török, M. E., Holden, M. T., Brown, N. M., Ogilvy-Stuart, A. L.,
... and Peacock, S. J. (2013). Whole-genome sequencing for analysis of an outbreak of meticillin-
resistant Staphylococcus aureus: a descriptive study. The Lancet infectious diseases, 13(2), 130-
136.