Internal control

Internal control violations There was a total internal auditing division violation of the regulation in the K-Marts case. When the disproportional asset inflation was seen in the company revenues, it should have been immediately reported to the SEC and other concern authorities, but it was not done. In fact, the amount inflated was almost 10% of the total revenues are the inflated revenues. Therefore, internal control mechanisms of Kmart should play the role of the whistleblower policies. The…

Internal control is defined by IAS 35, paragraph 4 (c) the as, ‘The process designed, implemented and maintained by those charged with governance, management and other personnel to provide reasonable assurance about the achievement of an entity’s objectives with regard to reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations. The term “controls” refers to any aspects of one or more of the components of internal control…

There are some very important vital factors and critical issues presented in this case study. Both organizational culture and internal control effectiveness interact together to produce and deliver hierarchical results (HARTMANN, 2011). A game plan of shared suppositions, qualities, and feelings, which represents how individuals act in association is known as organizational culture. All affiliations develop its own specific exceptional society, even relationships in the same business will show…

Case Study 2 (Learning Objectives 2, 4: Explain the components of internal control; evaluate internal controls) Each of the following situations reveals an internal control weakness: Situation a. In evaluating the internal control over inventory for the Williams Oil Services Company, an auditor learns that the warehouse receiving clerk is responsible for ordering parts for supply inventory use in drilling services, counts the inventory when received at the dock, records the receipts into the…

order to gauge the success of internal controls over financial reporting (p. 185). In addition to establishing auditing and attestation standards, the PCAOB was responsible for establishing quality control, ethics, independence, and other standards…

SAS No. 115 SAS No. 115 in particular guides auditors on the way that they should deal with the internal control deficiencies in the case of performing their work. In particular, the auditors remain guided on what they should do in the case that they discover deficiencies in the internal control of an entity especially at the time when they are auditing the financial statements. The section is applicable in the case where the auditor issues a statement to the point of disclaiming or…

1). The requirement of section 301.4 of the Sarbanes-Oxley Act of 2002, the audit committee of a public company needs to establish procedures for the receipt, retention, and handling of complaints received by the company regarding accounting, internal controls, or auditing matters. They are also required to establish procedures for those complaints to be treated confidentially, and for the submission process, the employees can submit anonymous their complaints about the accounting or auditing…

COMPLAINCE WITH RULES AND REGULATIONS The duties performed by the AC are essential in evaluating effectiveness. The Treadway Commission Report requested for a written charter for every AC outlining their duties and responsibilities. It is expected that detailed charters should be prepared so as to assist ACs in carrying out their duties effectively. The Treadway Commission Report stated that such a charter would ensure that committee members were aware of their duties and responsibilities and…

[7] Assume that a close family member came to you with information about a potential fraud at his or her employer. Prepare a summary of the advice you would offer as he or she considers taking the information forward. Before advising information about a potential fraud, it is important for the individual to have an understanding of the facts giving rise to concern. Because understanding of the facts, it helps to avoid prematurely filing a complaint that may be based of perception or emotion.…

.1 It is imperative that all the stakeholders in GR8 Prospects understand the difference between Internal Auditing and External Auditing in terms of the primary objectives: • External Audit:  The external auditors are not the employees of the organisation. They report directly to the Shareholders of the organisation. They main duty is to tests the underlying transactions that form the basis of financial statements. They form an opinion as to whether or not these statements reflect a true view.…