Internal control system cannot fully be regarded as effective not even when the design and implementation is properly done; this is because the effectiveness of an internal control system depends on the competency and dependability of the people using it. Bank failures and widespread losses over the past two decades, have clearly pointed out the picture of how fraud has penetrated the financial strength of banks; it has however, elevated the importance of effective internal control system within the formal financial sector worldwide. Organizations set up internal control system most at times because they are required by law to do so; but then, how many has actually made it a point of duty to train and educate employees on how to use these internal control system since its effectiveness depends on the competency and dependability of the people using it. This research paper defines internal control, as a means to an end; it is aimed at verifying the conception that an efficient and effectively implemented internal control system is the best strategy for preventing and detecting fraud especially in the banking sector; thus the objective of this research is to examine the effect of the internal control system, when it comes to prevention and detection of fraud. Data captured in this study, was analyzed through descriptive method.
Internal Controls Internal controls are all of the protocol and methods by which a company or organization protects its assets and ensures the correctness and reliability of its financial and accounting records. Tight internal controls are essential to any company that desires confidence in its stockholders and clients. Recent accounting scandals at companies such as Enron and Tyco have necessitated the need for strong internal controls and accounting procedures. As a result of these accounting. There are two primary goals of internal control. The first goal is to keep assets safe from robbery, theft by the employees, and any other unauthorized use. The second goal is to assure the reliability and accuracy of the accounting records.
KPMG: The Internal Controls Practical Guide - Essay Example
To browse Academia. Remember me on this computer. Enter the email address you signed up with and we'll email you a reset link. Need an account?
Despite the growing interest in research on the topic of internal control, there is confusion about the concept in both theory and practice. This study addresses this lack of clarity by systematically structuring the literature that uses the concept by investigating what we know from previous studies about the practice of internal control and how it is institutionalized. The review finds that the understanding of internal control is currently divided: one part of the literature understands the concept as internal control over financial reporting, while the other part has a more global and strategic understanding of the term. Internal control is institutionalized by different organizational actors at the micro level in an attempt to implement internal control systems that are not a simple act of compliance but present an added value for the organization. At the same time, it is noteworthy that not all categories of institutional work could be identified in the internal control literature, indicating that the actors are largely limited by their institutional embeddedness.