Running head: IMPORTANCE OF INTERNAL CONTROL IN BUSINESS 1

Importance of Internal Control in Business

IMPORTANCE OF INTERNAL CONTROL IN BUSINESS 2
Introduction
Brazos Manufacturing, Inc.(BMI), a $550 million international automotive parts supply company. It had urged to cut the budgets of its all of the vice presidents. The executive vice president of BMI fraudulently used corporate funds, set up an executive’s double standard and was above the law. However, the ethics officer considered the EVP’s tenure and 30 years authority and was at the very highest levels officer in North America. He wanted to avoid personal involvement in the case he should take action. The controller of company confronted the unethical behavior. He decided to strictly enforce the standards of BMI and disclose the ugly fact. How did company deal with the issues? How did company foresee the importance of the internal control in business and improve it and achieve its budgeted objective?

IMPORTANCE OF INTERNAL CONTROL IN BUSINESS 3
Discussion
In this case, EVP admitted to everything quickly and had apologized sincerely, and asked to keep his job. (Source) BMI should make the decision based on EVP’s attitude for his fraudulency instead of how huge his contribution to the organization for the past 30 years. Today, the legal and moral culpability of top-level company managers and the ethical dilemmas which auditors faced are the challenging issues that affect internal control in business organizations and even damage the interests of company stakeholders, such as stockholders, employees and the community. Managers are responsible for attaining the goals of the organization, targeting particular levels of budgeted income and implementing internal control system. To achieve