Internal Controls
Internal Controls
XACC/280
April 7,2013
Axia
Internal Controls Internal controls are put into place to safeguard a company’s assets and to promote the accuracy of their accounting records. There are two primary goals of internal controls. The first goal of internal controls is to safeguard it’s assets from employee theft, robbery, or unauthorized use. When there is a large some of money there is temptation from employee’s to take some of it. Many employees believe they are underpaid so they steal money from the company to compensate for this. Robbery is another area that affects a company. Not only is there a financial loss, but also the emotional toll it takes on an employee can be quite traumatizing or even result in death in worst case scenarios. The result of a robbery can result in the business loosing the employee because of the fear they may have to return to work. Other employee’s can also decide not to return to work due to thinking the workplace is not safe and this could happen again possibly to them. The company will need to try to find new employees and spend the time to train them. When a customer pays with a check, debit, or credit card the customer’s account numbers can be copied by the cashier and used for their own personal fraudulent use. This is considered unauthorized use and can affect the business by having to reimburse the victim for the monetary value they were stolen form and also result in loss of business from that customer and possibly their friends and families. They will not want to continue doing business where the theft occurred and will also tell people about the crime that occurred. The Sarbanes- Oxley Act of 2002 or SOX was created by Congress to address accounting reform, improve corporate governance, and restore investor confidence signed by President George W. Bush on July 30, 2002. Partly due to the Enron scandal of 2001 SOX requires the retention of audit paper work to be archived in the case a review is
XACC/280
April 7,2013
Axia
Internal Controls Internal controls are put into place to safeguard a company’s assets and to promote the accuracy of their accounting records. There are two primary goals of internal controls. The first goal of internal controls is to safeguard it’s assets from employee theft, robbery, or unauthorized use. When there is a large some of money there is temptation from employee’s to take some of it. Many employees believe they are underpaid so they steal money from the company to compensate for this. Robbery is another area that affects a company. Not only is there a financial loss, but also the emotional toll it takes on an employee can be quite traumatizing or even result in death in worst case scenarios. The result of a robbery can result in the business loosing the employee because of the fear they may have to return to work. Other employee’s can also decide not to return to work due to thinking the workplace is not safe and this could happen again possibly to them. The company will need to try to find new employees and spend the time to train them. When a customer pays with a check, debit, or credit card the customer’s account numbers can be copied by the cashier and used for their own personal fraudulent use. This is considered unauthorized use and can affect the business by having to reimburse the victim for the monetary value they were stolen form and also result in loss of business from that customer and possibly their friends and families. They will not want to continue doing business where the theft occurred and will also tell people about the crime that occurred. The Sarbanes- Oxley Act of 2002 or SOX was created by Congress to address accounting reform, improve corporate governance, and restore investor confidence signed by President George W. Bush on July 30, 2002. Partly due to the Enron scandal of 2001 SOX requires the retention of audit paper work to be archived in the case a review is
References: Intercepting the fraudsters at work. (2002, August). Irish Times, (), . ProQuest. Limitations of the organizations internal control. (2011). Retrieved from http://www.articlesbase.com/accounting-articles/limitations-of-the-organizations-internal-control-4053187.html Recovry After a Robbery: . (n.d.). Retrieved from http://www.drdebraholland.com/handouts/RobberyHandout.pdf THE SARBANES-OXLEY ACT OF 2002: SALVATION FROM FRAUD OR TERMINATION OF AUDITING. (2002, Juky). Allied Academies International Conference. Academy of Legal, Ethical and Regulatory Issues. Proceedings, 6(2), 73-76. ProQuest. Vuong, A. (2006, November 19). Feds to ease corporate curb Sarbanes-Oxley Act,. Denver Post. Retrieved from http://search.proquest.com.ezproxy.apollolibrary.com/docview/410833231/13D45E6F03E463D2401/1?accountid=35812