Internal Control and Accounting System Design

Internal Control and Accounting System Design

Is a process for assuring achievement of an organization’s objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws.

At the organizational level, internal control objectives relate to the reliability of financial reportin

Controls can be evaluated and improved to make a business operation run more effectively and efficiently.For example:

• Internal control: An effective internal control structure includes a company’s plan of organization and all the procedures and actions it takes to
• Internal Control Responsibility: the general responsibility of all members in an organization
• Computer Controls:The exact control steps depend on whether a company is using mainframe computers and minicomputers.

According to the Committee of Sponsoring Organizations of the Treadway Commission, there are five components of an internal control structure.The components are:1. Control environment 2. Risk assessment 3. Control activities 4. Information and communication 5. Monitoring

Internal Control Structure: includes a company’s plan of organization and all the procedures and actions*Segregation of employee duties *Assignment of specific duties to each employee *Rotation of employee job assignments *Use of mechanical devices *Record Keeping *Employees *Legal requirements

The need to control cash is clearly evident and has many aspects. Without the proper timing of cash flows and the protection of idle cash, a business cannot survive

1Cash and Internal Control: Cash is the asset that has the greatest chance of “going missing” and this is why we must ensure that we have strong internal controls build around the cash process.