- Bus 4068 Unit 4 Assignment 1 Internal Control Process.
50.
Internal control:
Internal control is the course of a company’s operations being controlled internally to meet the organization’s aim. Fraud and embezzlement, for example, are activities that ought to be avoided, assuming the goal is to be met.
A. Evaluating as to how well Frank and Joe have handled the problem, Skyworks internal control is not satisfactory:
After learning of a fraud, including a $14000 cash misappropriation at the Larson cement plant, I chose to investigate. Frank Larson utilized verification to track down the fraudster. There is embezzlement in a bank account that is overdrawn by $14000. Frank Larson has established viable internal control by separating jobs and appointing two individuals. Joe oversees bank reconciliation, while Betty oversees credit approvals, bill payments, and assortment.
Accordingly, Frank and Joe can sort out who the fraudster is. Frank asked Joe to lead an internal audit of Betty’s work. In addition, Frank installed a baffling camera to monitor all that Betty does at her workstation. Frank handled the situation brilliantly by appointing a fraud investigator without illuminating Betty, and that is how capably he managed the
B. Evaluating Larson cement internal control processes:
Because of the accompanying factors, Larson has adequate internal controls in place:
Larson Cement Company has implemented an appropriate internal control framework. Two accountants have been appointed, and there is a clear division of responsibilities. One individual handles account receivables and bank reconciliation, while the other handles bill payment and assortment.
Bus 4068 Unit 4 Assignment 1 Internal Control Process
Separated jobs should decrease fraud in a business setting. Frank, the individual in charge of the company’s financial affairs, is knowledgeable in financial topics and habitually audits his subordinates’ work to maintain control over them. Monitoring subordinates’ work is also an essential part of sound internal control Allowing one accountant to be audited by another accountant within the organization is a respectable practice for diminishing fraud. Subsequently, Larson Cement maintains an acceptable degree of internal control.
51.
Internal control:
Internal control concludes inside business control undertakings with the ultimate objective of accomplishing authoritative destinations. Exercises that are negative for the accomplishment, like extortion and misappropriation, should be bound.
a. Assessing Skywarks inside control:
Skywark inside control isn’t great.
There should be partitions of obligations. One who stays aware of cash due shouldn’t manage. Mark works alone and knows all bookkeeping records, debt claims,
creditor liabilities, cash, etc. Check out the book Finance, contrary to the Standards of Partition of a Division of Obligations.
A periodical inside frame is essential to check the work done by the accountant.
Bus 4068 Unit 4 Assignment 1 Internal Control Process
Rich doesn’t regularly audit the financial reports and is essentially amped up for deal figures. It indicates the absence of control over Rich’s fundamental obligations to administer business issues.
This recommends that legitimate inside control is absent in business.
b. Disclosing concerning how well Rich handled the issue with Mark:
Rich had not taken care of the issue with Mark cautiously. After learning about the extortion or theft of assets by Mark, Rich ought to clandestinely designate an autonomous misrepresentation examiner to gather confirmation against him and stop his admittance to significant archives, such as dealing with assuming cash and web banking framework.
Furthermore, after several confirmations were made, he rebuffed through court. Instead, straightforwardly terminating Mark is some unacceptable advance taken by them. Direct terminating exacerbated things. Accordingly, Rich has not handled the circumstances well, failing to apply a thorough Bus 4068 Unit 4 Assignment 1 Internal Control Process that would have prevented the situation from escalating.
References
IRS – Internal Control and Fraud Prevention: https://www.irs.gov/compliance/criminal-investigation
The Institute of Internal Auditors (IIA) – Internal Control Guidelines: https://www.theiia.org
U.S. Department of Justice – Fraud and Financial Crimes: https://www.justice.gov/criminal-fraud
Association of Certified Fraud Examiners – Fraud Prevention: https://www.acfe.com
Financial Fraud Investigations – U.S. Securities and Exchange Commission: https://www.sec.gov