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PUB4870 ASSIGNMENT 2023 (INTERNAL CONTROL)
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PUB4870 ASSIGNMENT 2023 (INTERNAL CONTROL)
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ContentsQUESTION ................................................................................................................ 2
CLASSIFICATIONS and COMPONENTS of INTERNAL CONTROLS ....................... 2
CONTROL OBJECTIVES BENEFITS OF ORGANIZATIONAL CONTROL................ 4
EFFECTIVE INTERNAL CONTROLS AND RISK MANAGEMENT IMPLEMENTATION
................................................................................................................................... 4
References ................................................................................................................. 7
, QUESTION
The design of an internal control system is usually followed up by
implementation of the system and the various types of controls and control
procedures included in it. Thereafter the maintenance and monitoring of the
system is important to ensure that internal controls are in place and functioning.
Describe in detail and illustrate with the use of examples, the implementation,
maintenance and monitoring of an internal control system.
Financial information, especially for medium-sized and large enterprises, contains
valuable information which needs to be protected to avoid manipulation to strengthen
internal controls (Hill & Varone, 2021). Internal controls management assists in
meeting this requirement. By managing key accounting, operational, financial and
compliance risks through internal controls implementation, firms can reduce their
exposure to risk (internal risk assessment) and hence enable their management to
efficiently run the business operations. Internal controls are created based on
organizational policies, procedures, practices and structure and they provide
reasonable assurance that organizational objectives are achieved.
The IMPORTANCE of GOOD INTERNAL CONTROLS and AUTOMATING INTERNAL
CONTROLS
The main objective of Internal controls is to prevent, detect and correct undesired
events within an organization (Bergmann, Fuchs, & Schuler, 2019). Internal controls
define what should be achieved and what should be avoided within an organization.
CLASSIFICATIONS and COMPONENTS of INTERNAL CONTROLS
Preventive Control
Preventive control prevents an error, omission, or malicious act from occurring
(Mundonde & Makoni, 2023). They predict potential problems before they occur and
make the adjustments. Examples of preventive controls are Segregation of Duties,
Approvals, Authorization and Verification.
Detective Control
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