Internal control

CONTROLS After the court verdict that Lewis group must refund the clients they illegally sold insurance to, the company’s CEO Johan Eslin explained “our IT systems included coded controls which excluded loss of employment insurance cover from being selected as an option to sell for certain categories of customers, our investigation revealed that mistakes occurred during the process of entering the client’s employment status details into the system” . Control is a process of minimising…

egregious and fraudulent activities. The effects of these companies’ mismanagement has been so troubling that congress passed legislation in 2002, called the Sarbanes-Oxley Act of 2002 (SOX); which requires public companies to have established internal controls and to have them published with the Securities Exchange Commission (SEC) (pg.132 Edmonds). This act is only a requirement for US publicly traded companies. However, private companies should…

Assess: Fraud: Type/Scheme Control Opportunity Occurs/Fraud Scenario Concealment Red Flags Conversion Journal Entry Scheme The scheme likely occurred due to management override of controls. Strengthen controls to discourage management override may prevent this from happening again. CFO is creating journal entries to increase company inventories and decrease costs of goods sold. Internal audit team was required to meet directly with CFO and the CFO required the internal audit team to work on…

The fraud perpetrated at Rite Aid could have been detected through the reconciliation of liabilities with monthly statements from the creditors. By reconciling the liabilities with the vendors’ statements, the auditors would have been able to detect any omission of liabilities or the reversal of expenses as was the case at Rite Aid. Also, the auditors could have used analytical procedures such as ratios for the year of audit and compared it to prior periods to detect unusual patterns or trends.…

the company audit is the controversial issue in the case given. It had justified that the independent auditor relied on the delivery receipts as the audit evidence based on the ‘segregation of duties’ system. The case here explained that JGI’s internal control procedures for inventory had been executed by different person as the purchasing, receiving and approving functions are performed by the different people than the person who executed the transactions. Different people executing different…

Culture and Management Style: The way Bank of America present its own culture will influence the performance results of the management team implementation of the organization control system, management style is probably the most important and will have the biggest impact on the management control system depending on how the management team is perceived in the entire organization, from the CEO down to the lower layer of supervisors. Informal Organization: Management needs to recognize the…

authors of the book “Auditing and Assurance Services, control environment is defined as the foundation for all other components of internal control on which an effective system of internal control is built and operated by an organization. It serves as a guide to all participants and stakeholders. Control environment includes three important factors; integrity, ethical values and competence of the entity’s people. There are several aspects of the control environment were apparently circumvented…

The purpose of this paper is to incorporate biblical principles to this course of Managerial Accounting. Being a Managerial Accountant requires a person to be responsible for other’s money in which God has appointed and entrusted that person. Every part of the accounting process requires the appointed person to be a good steward. In biblical times, Jesus told this parable in Luke 16:1-2, “There was once a rich man who had a servant who managed his property. The rich man was told that the…

self-regulations of the public accounting firms. It created Public Company Oversight Board (PCAOB), which is an independent, nonprofit organization, which can make it more credible. As it doesn’t have no outsider influence. It has given power by the SEC to control and implement the regulations of the accounting field. Because of the regulations of SOX and PCAOB it is compulsory for all accounting firms to register and issue their audit reports. It is created to investigate and question…

client. They are responsible for appointing the quality assurance personnel who review the work performed by the external auditors to ensure that it meets all standards (MW&A 2016). In regards to internal controls, they are responsible for validating transactions processed through the internal control system. The corporate directors are those individuals charged with governing the company (ACCA 2009). They are directly responsible for coming up with standards followed in the organization.…