Case study II – Internal control

Managerial Accounting and Finance – ACCT 504
Keller Graduate School of Management
May 2013 Session
Date of June 11, 2013

Table of Contents Introduction 1 Internal control rules and regulations requirements before going public 1 THE BAD – Things that the company does poorly 2 Recommendations to the President 4 Conclusion 6 Bibliography 7

Case study II – Internal control
Introduction
Internal control refers to methods, techniques and measures that are practices by a company to safeguard the assets, enhance reliability of its accounting records, increase efficiency of its operations and making sure everything they do is in line with laws and regulations as ordered by security and …show more content…

In order for the company to achieve effective internal control practices, management and employees as a team have to ensure that they are following through the principles of internal control activities which are establishment of responsibility, segregation of duties, documentation procedures, physical controls, independent internal verification, human resource controls (Kimmel, Weygandt, & Kieso, 2011, pp. 338-344)
First consideration is on segregation of duties. It is nice to see that the company has in long term employees but he/she should not be granted too much power no matter how long they have been working with the company. The treasury controller should have been subjected to some segregation of duties and record keeping; and because he was responsible for more than one duty that breaks the first principle of internal control practices and that could also tempt him to commit fraud. The author of this paper recommends hiring of other personnel who will be in charge maintaining records and Treasury Controller should only be in charge of purchases.
Second recommendation comes from concerns with petty cash handling. There should be a restriction of access to the cash