The Use of Internal Controls in Accounting

Authorization controls refer to procedures developed to limit the capability of men and women to either pay for or dispose of assets solely on their very own initiative. Any technique that requires the collusion of 2 or a lot more folks to accomplish an illegal act tends to inhibit illegal physical exercise or at least make the detection of these kinds of acts more likely.

Feedback controls, for example transaction recording and verification, cause actions to become additional transparent than would be the case during the absence of these kinds of procedures. Transparency inhibits illegal activity. As an example, the Code of Practice covering internal controls at ENI Corp.

One ought to not regard the computer processing of accounting records as an incidental activity that does not affect the internal control function. In fact, the capacity to procedure accounting information electronically creates it easier for organizational personnel to avoid internal controls (Chapman 25).

It is crucial to remember that, though an corporation establishes internal control procedures for each operation wherein assets are at risk, the several sets of internal manage procedures are a part with the bigger organizational procedure of internal controls. Thus, the integrated functioning of internal controls for money transactions, materials acquisition, vendor payments, inventory management, as well as the myriad other assets protection functions in an business makes a unified whole for the protection of an organization's assets or assets controlled by an company (Heiman-Hoffman, Morgan, and Patton 75-77). Here internal control policy with the Halliburton Company illustrates a comprehensive organizational procedure of internal controls.

Police organizations, for example the NYPD, handle money in numerous a variety of contexts. 2 examples are (1) funds as evidence and (2) funds transactions involving police auctions. The NYPD conducts auctions of surplus equipment, unclaimed property, and seized residence (Comptroller, City of New York 14).

Responsibility. The implementation and maintenance of internal accounting controls, procedures and records which are enough in all respects to satisfy the needs of this Corporate Policy stands out as the main responsibility with the Chief Financial Officer.

 

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