Internal Control Compliance [4]
论文作者:英语论文论文属性:议论文 Argument Essay登出时间:2015-07-02编辑:Karlie点击率:7299
论文字数:2229论文编号:org201507012320584376语种:英语 English地区:美国价格:免费论文
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摘要:本论文主要阐述了作为一个企业,其内部控制合规对其发展运营的重要性,并提供一个概述的内部控制框架和有关内部控制的相关法律法规。
wn account level weaknesses, they have a tough time sufficiently testing for company level deficiencies as they relate directly to the inefficiency of management to control their organization. This is mainly evident in smaller organizations that do not have the resources to maintain a robust internal control process. However, another type of material weakness which has to do with trouble of interpreting and applying complex accounting standards can be seen in large and diversified businesses (Doyle et al., 2007).
A final type of material weakness has to do with the detection of inadequate revenue policies or control flaws in the period-end reporting process. This weakness allows senior managers a greater opportunity to manage earnings as it has a direct effect on the accuracy of financial statements (Doyle et al., 2007). Research indicates that managers like to tweak their revenue recognition policies at an end of a period to boost their earnings (Ge & McVay, 2005). This is because they are trying to meet or exceed the expectations set by financial analysts for an organizations' performance over a given period. Ge and Mcvay (2005) suggest that larger organizations tend to create some leeway into their revenue recognition policies because they could face greater demands to manage their earnings well. Thus this material weakness could lead to a strong likelihood of revenue fraud in these organizations.
All these material weaknesses are covered in detail on the internal control reports. Thus appropriate solutions to these weaknesses should have a significantly positive effect on the accurate development of financial statements. An organization's financial position over its competitors as well as trust with its investors is greatly enhanced when financial statements are accurate. This also instills confidence in the employees of an organization concerning the integrity behind their operations. But for this to last for the long-haul, organizations must do more than just efficiently adapt and monitor their internal control process. They must embrace them as an essential factor for sustained organizational success.
Embracing Internal Control
In order to maintain consistency for the long-term concerning internal control, organizations must embrace internal control as a vital part of daily business operations. It should go beyond than just compliance to federal laws. It should be part of an organizational culture. Two examples of embracing internal control can be implementing internal controls beyond financial operations and delegating ownership and accountability to operating personnel in each functional area an organization (Langer and Popanz, 2006). Organizations that are successful in implementing internal control frameworks emphasize the value of genuinely embracing the frameworks' principles which allow an organization to be flexible to organizational changes of in future (Brune, 2004). Embracing internal control can result in cost savings, process improvement efficiencies, exceptional risk management and limit needless surprises for an organization (Langer and Popanz, 2006). With the current economic environment, all those factors will play a critical role in the long-term survival of any organization.
References
Applegate, D., & Willis, T. 1999. Integrating COSO. Internal Auditor, 56(6): 60-66.
Brune, C. 2004. Embracing internal
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