...Chapter 9 Introduction to internal control systems Internal controls: the controls established to protect the assets of an organization. Internal control: describes the policies, plans, and procedures implemented by the management of an organization to protect its assets, to ensure accuracy and completeness of its financial information, and to meet its business objectives. Four objectives of internal control system: 1. Safeguard assets, 2. Check the accuracy and reliability of accounting data, 3. Promote operational efficiency, 4. Enforce prescribed managerial policies. Sarbanes Oxley Act of 2002 piece of legislation with respect to internal controls Section 404: reaffirms management is responsible for establishing and maintaining an adequate internal control structure. 1992 Coso report: established common definition of internal control for assessing control system, as well as determined how to improve controls. An internal control system should consist of the five components: 1. The control environment 2. Risk assessment 3. Control activities 4. Information and communication 5. Monitoring Control environment: foundation for all other internal control components and provides discipline and structure. Top management oversight, integrity, and ethical principles that guide the organization Risk assessment: identify organizational risks, analyze their potential in terms of costs and likelihood of occurrence, and implement only those controls whose projected benefits...
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...Running head: CORPORATE COMPLIANCE REPORT Corporate Compliance Report Corporate Compliance Report With so many corporate scandals and misappropriation of finances, the United States government has developed many laws and action agencies to aid in reducing the amount of corporate mishandlings. Regulatory legislation mandating a report on internal controls is now a corporate obligation. Risk management is a fundamental area of importance to stakeholders. Organizations that are best practice companies look to the Committee of Sponsoring Organizations for guidance to develop efficient internal controls, enterprise risk and against fraudulent activities. This paper will outline a plan to implement enterprise risk for an organization of choice. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) “is dedicated to guiding executive management and governance entities toward the establishment of effective, efficient, and ethical business operations on a global basis. It sponsors and disseminates frameworks and guidance based on in-depth research, analysis, and best practices” (COSO, 2006). COSO is a private-sector program funded and sponsored by five professional organizations. The Committee conducted an 11-year research study to analyze instances of fraudulent financial reporting and determine contributing factors that lead to financial statement fraud (COSO, 2006). COSO’s research demonstrated that most fraudulent behavior involved the chief...
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...(COSO) Enterprise Risk Management (ERM) – Integrated Framework (2004) is a guideline for managing risk and understanding internal controls. The eight components of the COSO ERM Framework are as followed: internal environment, objective setting, event identification, risk assessment, control activities, information and communication, and lastly, monitoring. Here we define/describe these eight components: a. The Internal Environment captures the tone of the organization and the sets the standard on how risk is viewed and addressed by the entity’s members. The entity will define such things as: risk management philosophy and risk appetite, integrity and ethical values, and the environment in which they operate. b. The Objective Setting is the objectives that exist before management identifies potential events that will affect their achievement. c. Event Identification are internal and external events affecting achievement of an entity’s objectives that are indentified, then distinguished between risks and opportunities. d. Risk Assessment is simply risks that are analyzed as a basis for determining how they should be managed. Risks are assessed on an inherent and a residual basis. e. Risk Response is avoiding, accepting, reducing, or sharing risk. Management develops a set of actions to align risks with the entity’s risk tolerances and risk appetite. f. Control Activities are policies and procedures that are established and implemented to help ensure the risk responses are effectively...
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...trademarks or registered trademarks of Microsoft Corporation in the United States and/or other countries; Intel® and SpeedStep® are registered trademarks and Core™ is a trademark of Intel Corporation in the U.S. and other countries; Blu‑ray Disc™ is a trademark of the Blu‑ray Disc Association; Bluetooth® is a registered trademark owned by Bluetooth SIG, Inc. Other trademarks and trade names may be used in this manual to refer to either the entities claiming the marks and names or their products. Dell Inc. disclaims any proprietary interest in trademarks and trade names other than its own. Regulatory model: P11E Rev. A00 October 2010 Regulatory type: P11E001 CONTENTS CHAPTER 1: SETTING UP YOUR LAPTOP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Before Setting Up Your...
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...-1970s, the U.S. Securities and Exchange Commission (SEC) and the U.S. Congress enacted campaign finance law reforms and the 1977 Foreign Corrupt Practices Act (FCPA) which criminalized transnational bribery and required companies to implement internal control programs. In response, the Treadway Commission, a private-sector initiative, was formed in 1985 to inspect, analyze, and make recommendations on fraudulent corporate financial reporting. The Treadway Commission studied the financial information reporting system over the period from October 1985 to September 1987 and issued a report of findings and recommendations in October 1987, Report of the National Commission on Fraudulent Financial Reporting. As a result of this initial report, the Committee of Sponsoring Organizations (COSO) was formed and it retained Coopers & Lybrand, a major CPA firm, to study the issues and author a report regarding an integrated framework of internal control. In September 1992, the four volume report entitled Internal Control— Integrated Framework was released by COSO and later re-published with minor amendments in 1994. This report presented a common definition of internal control and provided a framework against which internal control systems may be assessed and improved. This report is one standard that U.S. companies use to evaluate their compliance with FCPA. COSO was formed in 1985 to sponsor the National Commission on Fraudulent Financial Reporting (the Treadway Commission). The...
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...will expose you to lead, a chemical known to the State of California to cause birth defects or other reproductive harm. Wash hands after handling. Model: Satellite® L670 Series Recordable and/or ReWritable Drive(s) and Associated Software Warranty The computer system you purchased may include Recordable and/or ReWritable optical disc drive(s) and associated software, among the most advanced data storage technologies available. As with any new technology, you must read and follow all set-up and usage instructions in the applicable user guides and/or manuals enclosed or provided electronically. If you fail to do so, this product may not function properly and you may lose data or suffer other damage. TOSHIBA AMERICA INFORMATION SYSTEMS, INC. (“TOSHIBA”), ITS AFFILIATES AND SUPPLIERS DO NOT WARRANT THAT OPERATION OF THE PRODUCT WILL BE UNINTERRUPTED OR ERROR FREE. YOU AGREE THAT TOSHIBA, ITS AFFILIATES AND SUPPLIERS SHALL HAVE NO RESPONSIBILITY FOR DAMAGE TO OR LOSS OF ANY BUSINESS, PROFITS, PROGRAMS, DATA, NETWORK SYSTEMS OR REMOVABLE STORAGE MEDIA ARISING OUT OF OR RESULTING FROM THE USE OF THE PRODUCT, EVEN IF ADVISED OF THE POSSIBILITY THEREOF. Protection of Stored Data For your important data, please make periodic back-up copies of all the data stored on the hard disk or other storage devices as a precaution against possible failures, alteration, or loss of the data. IF YOUR DATA IS ALTERED OR LOST DUE TO ANY TROUBLE, FAILURE OR MALFUNCTION OF THE HARD DISK DRIVE OR OTHER STORAGE...
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...Internal Control Evaluation An auditor uses a checklist template when conducting an audit of internal control. The auditor will assess the financial condition and internal procedures. Internal control process must comply with industry standards and regulatory requirements. Corporations must prepare responses to auditors and should have an internal control system in place. “Five components of internal control are considered to be criteria for evaluating a company’s financial reporting controls and the bases for auditor’s assessment of control risk as it relates to financial statements” (T. Louwers, R Ramsay, D Sinanson, J. Strawser, 2007 p. 163) The internal control evaluation has three phases in which an auditor uses to form assess the corporation and form an opinion. Phase 1 Understand and Document the Client’s Internal Control The primary objective of Phase 1 is to become familiar with the work and control environment. The auditor must learn the control environment by setting up interviews with staff. Auditor should ask specific questions about the flow of transactions in the accounting system. The corporation should provide the auditor with the design of the control procedures. To examine the control environment and complete an evaluation, the auditor will contact the Human Resource Department for a copy of the code of employee conduct and performance methods. The organizational chart will help the auditor identify management team and area of responsibility. To measure...
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...Justification for Internal Control Paper Sharmain Carthan ACC/544 September 1, 2014 Professor Fred Johnson Justification for Internal Control Paper A system of internal controls ensures preparation reliable financial statements, compliance with financial regulations, reduce risks, and identify and achieve short and long-term goals. Management uses internal controls to adapt to economic changes (AICPA, 2011, p. 2). Although there are controls in place with insurance and portfolio approaches, an efficient and cost effective internal control system is still needed. Insurance and portfolio approaches that manage and analyze risk and both plays an intricate part in the internal control system. It is important to have an effective internal control system because with Sarbanes-Oxley Act the responsibility to ensure that the financial reporting is done accurately and efficiently. The Chief Executive Officer (CEO), Chief Financial Officer (CFO), and other upper level of management have this responsibility and are considered fiduciary. They have responsibilities to safeguard the assets of the company and can be held personally liable. Part of their responsibilities includes plan administration functions such as maintaining the financial books and records of the plan, and filing a complete and accurate annual return/report for your plan. Fraud and errors can occur at any point in the system. That is why it is important to establish safeguards to ensure the fiduciary responsibilities...
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...Control Self-Assessment Introduction: Management has the responsibility to ensure that effective, sustainable internal controls to keep their areas in line with stated corporate directions, to help it achieve its mission, to minimize surprises and risks, and to allow the organization to successfully deal with change, have been established within their organizations. Internal controls are defined as activities undertaken to increase the likelihood of achieving management objectives in three areas: * Efficiency and effectiveness of operations * Reliability of financial reporting * Compliance with laws and regulations There are many techniques for reaching all parts of an organization in order to assess and manage risks in the organization, self-assessment by front line staff is one of these techniques, some argue the widespread use of questionnaires that are completed by key employees, The questionnaires are designed in a way to help the management in identifying risk and eliminating considerations of risk that do not apply to a department within the organization. The questionnaire serves as management tool for the organization in evaluating how well risks are being addressed through current control policies and practices. It is designed to raise awareness of certain issues and encourage further analysis and discussion. Another technique is the use of interviews with managers in particular business units to determine whether the area is under control...
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...Android Operating System POS/355 June 19, 2013 Castle Phelps Introduction The “Android” operating system is in many users opinion the best mobile device operating system in use today. It allows mobile device manufacturers the ability to tailor the operating systems for the specific device it to be used on, In this essay we will talk about what makes the Android operating system the most popular operating system out on the market today and why it controls the majority market share for mobile devices. We will discuss how the Android allows for external storage of applications, expandable memory, and use of the Google “Cloud” with apps such as Google Drive, Google Play, and Google Wallet. We will also cover how android deals with internet security, viruses, and malware on their mobile devices operating systems. Memory Management The fact that Google allows mobile device manufacturers to customize the android operating system for all of their phones and tablets means that each device will vary on how much internal memory will be used for android firmware and applications. Many of the higher end devices such as Samsung’s Galaxy line of devices offer 1GB of memory and up with expandable memory up to an additional 32GB with a micro SDHC card. Android is a software stack for mobile devices that includes an operating system, middleware and key applications. Android is a Linux based OS with a 2.6.x kernel, stripped down to handle most tasks pretty well; All the basic OS operations...
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...CHAPTER 1 1. DEFINITION INTERNAL CONTROL is a process effected by people at every level of an organization, designed to provide reasonable assurance about the achievement of objectives in the – effectiveness and efficiency of operations, - reliability of financial reporting, - compliance with applicable laws and regulations. A PROCESS: it is a multiplicity of processes, a series of actions, that is integrated with the basic management processes of planning, executing and monitoring in order to enable their function and in order to monitor them. It is not added on to an entity’s activity, but it should rather be “built-in” in order to be most effective. It is also critical to the success of quality programmes and to cost containment and response time (i.e. not adding new procedures but focusing on existing one and building internal control into them). PEOPLE: internal control is effected by the BoD, management and other personnel. People establish objectives, responsibilities, limits of authority and then put control mechanisms in place. Internal control recognizes that every individual brings in different abilities, needs, priorities, which affect internal control and are in turn affected by internal control itself. The BoD does not only oversee, but it also provides directions and approves transactions and policies, so it is an important element of internal control. REASONABLE ASSURANCE: internal control does not provide absolute assurance. Limitations regard faults in human...
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...guide helps you implement Domain Name System (DNS) on the Windows Server® 2008 operating system in a small network. Windows Server 2008 uses DNS to translate computer names to network addresses. An Active Directory® domain controller can act as a DNS server that registers the names and addresses of computers in the domain and then provides the network address of a member computer when the domain controller receives a query with the name of the computer. This guide explains how to set up DNS on a simple network that consists of a single domain. Contents Step-by-Step Guide for DNS in Small Networks 5 Planning DNS 6 Understanding the DNS namespace 6 Designing a DNS namespace 8 Creating an Internet DNS domain name 9 Creating internal DNS domain names 9 Creating DNS computer names 9 Installing and Configuring AD DS and DNS 11 Configuring Client Settings 19 Advanced DNS Configuration 27 Adding resource records 28 Automatically removing outdated resource records 29 Troubleshooting DNS 31 Step-by-Step Guide for DNS in Small Networks Domain Name System (DNS) is a system for naming computers and network services that maps those names to network addresses and organizes them into a hierarchy of domains. DNS naming is used on TCP/IP networks, such as the Internet and most corporate networks, to locate computers and services by using user-friendly names. When a user enters the DNS name of a computer in an application, DNS can look up the name and provide other information...
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...Barry is only able to visit the motel and café periodically, he is afraid of internal fraud. He wants help with implementing internal control systems in order to prevent or detect fraud. In the next parts we will discuss the main concerns in the motel and café and suggest internal control systems to Barry to tackle these. 2. Motel Business The biggest concern in the motel business is that the couple (employees) Barry hired, to run the daily operation of the Solana Motel and Cafe, is both in charge of receiving money and depositing money. This leaves a high opportunity to commit fraud. For example, the couple could not record the payment received from the customer, so it will not be noticed when this money is not deposited at the bank. Moreover, they are in charge of the records of the rooms rented. They could indicate that the room is not rented, while the room actually is rented and keep the payment. This will not be noticed because the payment is not recorded. The best way to counter these problems would be in the case where different tasks are performed by different people. However, in the case of Solana Motel and Cafe segregation of duties would be very costly, because it is a relatively small firm and they only have a few employees. Segregation of duties in larger hotels will be discussed more extensively in the last section. In order to control the couple, Barry could implement an automated system, in which customers can check–in online, so that Barry can keep track of...
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...1577-8517 Risks and Controls in the Implementation of ERP Systems Severin V. Grabski. Michigan State University, U.S.A. grabski@pilot.msu.edu Stewart A. Leech. The University of Melbourne, Australia saleech@unimelb.edu.au Bai Lu. Colonial Mutual Group, Australia blu@colonial.com.au Abstract. The implementation of ERP systems has been problematic for many organizations. Given the many reports of substantial failures, the implementation of packaged ERP software and associated changes in business processes has proved not to be an easy task. As many organizations have discovered, the implementation of ERP systems can be a monumental disaster unless the process is handled carefully. The aim of this study is to identify the risks and controls used in ERP implementations, with the objective to understand the ways in which organizations can minimize the business risks involved. By controlling and minimizing the major business risks in the first instance, the scene can be set for the successful implementation of an ERP system. The study was motivated by the significance, for both the research and practice communities, of understanding the risks and controls critical for the successful implementation of ERP systems. Following the development of a model of risks and controls, a field study of an ERP system implementation project in an organization was conducted to provide a limited test of the model. The results from the field study provided support for risks and controls identified in the...
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...any part of this paper without the written consent of the Society of Petroleum Engineers is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of SPE copyright. Abstract Auditors are trained to make detailed examinations of the internal control systems such as ISO 9001, ISO 29001, ISO 14001, OSHAS 18001, API, accounting systems and various legislative requirements and; focus their audit planning, testing, and reporting on internal controls in the business process. The Evaluation of controls without first examining the purpose of the business process and its risks provides no context for the results. How can the internal auditor know which control systems are most important, which are out of proportion to their risk, and which are missing? When controls are the central theme of the internal audit, audit reports and recommendations are generated for improving and strengthening internal controls. Over time, layer upon layer of controls are built up. These excessive layers of control...
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