Internal Controls And Internal Control System Essay
This document will discuss the purpose of the internal control system. The purpose of the internal controls system is to safe guard assets, ensure integrity of financial information, and to protect customer’s information. While auditing the ABC Company’s financial record I found an error which reflects the strength of their internal control system. So I’ve been asked to educate my fellow accountants on the limitations of the internal control system in preparation for an upcoming audit. Specifically this document will discuss the following: The limitations of the internal control system. Two examples of the internal control procedures and they can be implemented. I will identify symptoms of a lack of internal control, and I will explain the impact of the missing journal entry from the financial statements of ABC Company.
The Limitations of the Internal Control System
No matter how well design an internal control system is for a company it can only provide a reasonable amount of assurance to its objective (Hossain, 2013). The reality of it is that human being are not always trust worthy, even in management positions. Some humans make honest errors that can be and may have been caught later, but still have proven that the system failed. Other humans intentionally do dishonorable acts. There are many employee within a company that has access to data and if they get the chance will misrepresent and manipulate financial data to steal money. Some crooked…