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Essay / Research Paper Abstract
This 3 page paper looks at an accounting case provided by the student answering questions concerning potential limits of internal controls, how controls may be implemented, symptoms of lax control and potential problems over a journal missing entry. The bibliography cites 3 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEinternalc.rtf
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Unformatted sample text from the term paper:
will be using the system. It is impossible for any system to be 100% accurate as there is the potential for human error with a mistake, there are also potential
for fraud resulting from dishonesty (ACCA, 2009). It may be argued that there are ways that some of these potential weaknesses may be overcome, but this leads to another limitation;
cost. It is possible to increase security and robustness of systems, but this may increase the costs associated with the internal control, if the costs are greater than savings and
benefit then the measure is not worth implementing (Acca, 2009). However to assess the way system may be improved, within these limitations of human nature and cost, the ways that
a system may be improved should be considered. Potential Internal Control Procedures A formal and understood hierarchy of authority can increase the level of internal control, this will
allocate specific tasks to individuals who can then be held accountable, individual in an organization will have limited authority based on what authority is needed, this can be linked with
training, so that the way the authority to make decision is understood with the relevant organizational guidelines. Where a system of authority is in place the key element is that
of accountability (Watts. 2007). Authority is also likely to be linked a system of authorization. Where payments are made over a specific level it should be company policy that
the payments are authorised by two separate individuals, usually meaning the employee and a senior manager. This can be a system such as requiring two signatures for company cheques, and
authorizations of invoices over a specific level, including monetary value as well as umber of invoices in a set period of time (Watts, 2007). The authorization process should involve two
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