Xacc 280 Internal Controls
Internal Controls
Your Name
XACC/280
Date
Instructor Name
Internal Controls
Internal controls are an essential asset to any company that wishes to maintain their company’s security and accuracy. These controls help to protect the assets belonging to a company from unforeseen events such as employee theft, robbery, or any sort of unauthorized use (Weygandt, Kimmel, & Kieso, 2008). They also create the opportunity for accounting records to be more accurate and reliable by limiting the possibility for errors and irregularities (Weygandt, Kimmel, & Kieso, 2008). An independent internal verification that is provided via internal controls maximizes the benefits of this system (Weygandt, Kimmel, & Kieso, 2008). There should be physical, mechanical, and electronic controls so that when jobs are segregated, there are more than one opportunities for a final verification of accuracy (Weygandt, Kimmel, & Kieso, 2008).
Large events of fraud have happened within companies such as Enron and WorldCom (Weygandt, Kimmel, & Kieso, 2008). People generally remember only these because they are some of the most popular scandals in business history (Weygandt, Kimmel, & Kieso, 2008). However, there are many more reported each year. Because of this, the Sarbanes-Oxley Act was passed requiring all publicly traded U.S. corporations to manage and adequate system of internal controls (Weygandt, Kimmel, & Kieso, 2008). Otherwise they may be fined or imprisoned (Weygandt, Kimmel, & Kieso, 2008).
In previous years, it became obvious that corporate executives and board of directors did not pay close attention to the many individual jobs that were necessary to manage an efficient and accurate accounting system (Weygandt, Kimmel, & Kieso, 2008). Businesses allowed multiple people to manage the same duty creating a bigger possibility for errors to be made (Weygandt, Kimmel, & Kieso, 2008). The idea that all these employees were communicating their
Your Name
XACC/280
Date
Instructor Name
Internal Controls
Internal controls are an essential asset to any company that wishes to maintain their company’s security and accuracy. These controls help to protect the assets belonging to a company from unforeseen events such as employee theft, robbery, or any sort of unauthorized use (Weygandt, Kimmel, & Kieso, 2008). They also create the opportunity for accounting records to be more accurate and reliable by limiting the possibility for errors and irregularities (Weygandt, Kimmel, & Kieso, 2008). An independent internal verification that is provided via internal controls maximizes the benefits of this system (Weygandt, Kimmel, & Kieso, 2008). There should be physical, mechanical, and electronic controls so that when jobs are segregated, there are more than one opportunities for a final verification of accuracy (Weygandt, Kimmel, & Kieso, 2008).
Large events of fraud have happened within companies such as Enron and WorldCom (Weygandt, Kimmel, & Kieso, 2008). People generally remember only these because they are some of the most popular scandals in business history (Weygandt, Kimmel, & Kieso, 2008). However, there are many more reported each year. Because of this, the Sarbanes-Oxley Act was passed requiring all publicly traded U.S. corporations to manage and adequate system of internal controls (Weygandt, Kimmel, & Kieso, 2008). Otherwise they may be fined or imprisoned (Weygandt, Kimmel, & Kieso, 2008).
In previous years, it became obvious that corporate executives and board of directors did not pay close attention to the many individual jobs that were necessary to manage an efficient and accurate accounting system (Weygandt, Kimmel, & Kieso, 2008). Businesses allowed multiple people to manage the same duty creating a bigger possibility for errors to be made (Weygandt, Kimmel, & Kieso, 2008). The idea that all these employees were communicating their