Implement Internal Controls Case Study

iii. Implement Internal Controls The objective of internal control is to safeguard assets of the firm, ensure accuracy and reliability of accounting record, promote the efficiency of the firm’s operation, and to measure compliance with management’s policies. Besides that, the internal control is used to controls and checks consolidated into accounting activities and operations of a company to ensure their business operations are conducted efficiently and effectively (Trenerry, 1999). Valeant Pharmaceuticals International Inc should keep all the document for evidence such as invoice, purchase order, sales receipts and others to prevent the fraud happen. Besides, Valeant should enforce the HR policies. It is important for a HR manager to perform
Physical access means that only certain employees are able to access the door lock. They are the one who has the priorities to access to the important areas such as server room, administrative offices, filing cabinets and so on (Hotline, 2015). Logical access refers to access to the organization’s information system which means only certain individuals are able to access the system and other employees are restricted to access it (Hotline, 2015). Therefore, only accounting employees have the access to the data of the financial statements of the company and only sales employees have the access to the information of the customers. It is important to have access control to avoid the sensitive data disclosed to the third
For example, a Certified Fraud Examiner (CFE) is a fraud prevention and detection professional with proven expertise in the four major areas of fraud and they are trained to identify the signs and red flags that indicate evidence of fraud (Reed, 2014). A certified fraud examiner has the knowledge of multifaceted financial transactions with their understanding of law, techniques, and ways to resolve fraud allegations (Reed, 2014). iv. Annual Financial Statement Examination from Outside Party The people involved in fraud are normally in a group of members, they are not standalone. If the financial reports are checked by the third party annually, the management team may feel pressure because they are afraid the third party knows their fraud plan. It is also important to engage the third party in the checking of financial statements because this will prevent the company from losses. Investigation process also can be carried out immediately if the fraud of financial statements is detected.
v. Employees Act as Whistle