“A village bank is an informal self-help support group of 20-30 members, predominantly female heads-of-household. If the program is ‘on mission’ in a normal village bank about 50% of all new members entering the program will be severely poor – representing families with a daily per-capita expenditure of less than $1; the rest are moderately poor or non-poor. These women meet once a week in the home of one of their members to avail themselves of working capital loans, a safe place to save, skill training, mentoring, and motivation. Loans normally start at $50-$100 and are linked to savings such that the more a client saves the more she can borrow. The normal loan period is four months and is repaid in 16 weekly instalments,” explains John Hatch in his lecture, “A Brief Primer on FINCA", at the University of Berkeley's Haas School of Business, July 21, 2004.
5.4. Compliance Department The Bank must strengthen its compliance activities through the compliance department which must be separated from the risk department but the two must be in partnership. The department must be responsible for: The supervision and oversight of the Bank’s activities by pro-actively supporting senior management in stressing compliance responsibilities, its design and the implementation of applicable controls. The department must convey consistent monitoring of the Bank’s operations to ensure proper compliance risk mitigation. This duty must first establish a clear understanding of the compliance risk facing the Bank.
The implementation of many controls to prevent fraud haven't yet reached the level of satisfaction to most companies, managers and fraudsters in general have found various ways to misappropriate assets for their own benefit , ignoring the greater public and company's interests. Management fraud which is involved in accounting manipulation, is a type of fraud where inside people with key positions tend to misrepresent financial statement in using a false positive image about the financial performance of the company to affect the decisions of the financial statement users for the own gains.
In further support this finding, data retrieved from Public Company Accounting Oversight Board (PCAOB) on internal control explain segregation of duties in the aspect of separating the authorization of transactions, record-keeping and custody of assets and supervising the operations is a key to strengthen internal control. Adding to that, PCAOB says that segregation of duties also depends on the size or complexity of the business. It is hard to implement segregation of duties in smaller companies due to limited number of workers compared to larger companies. (PCAOB (2009, Jan 23) pg. 26 of
To name a few, asset misappropriation, corruption, and financial statement fraud are major categories of crime. It is important to know why top executives and officers commit financial misstatement crime; although, they are at the most respected position in the company and what motivates them to misstate or omit material information from the financial statement. These are the few thoughts that come to one mind when studying about various categories of
Such a system can also help to ensure that the bank will comply with laws and regulations as well as policies, plans, internal rules and procedures and decrease the risk of unexpected losses or damage to the bank’s reputation. Internal control systems help bank’s Board of directors and management to safeguard the bank’s resources, produce reliable financial reports and comply with laws and regulations. Internal control supports to reduce the possibilities of substantial errors and irregularities and assists in their timely detection when they do occur. Also, having effective internal controls may discover mistakes caused by personal distractions, carelessness, errors in judgment, or unclear instructions in addition or deliberate noncompliance with policies. Therefore, staff of banks must have proper knowledge on its internal control and be consistently applied to.
KUDIRAT TAJUDEEN Principles of Accounting Mid Term Exam Review of Chapter 7: INTERNAL CONTROL Introduction Internal control is an important part of any organization’s policies and procedures. It is a designed process put to effect by a company to establish reasonable assurance that the organization’s financial reports are reliable and are in accordance with laws, regulations and policies in line with generally accepted accounting principles (GAAP) and also safeguard the company’s assets from theft, unauthorized used or misuse and ensure the achievement of an organization’s objectives. The need for internal control Principal merchandising transactions has to do with buying and selling, it involves assets such as; cash, account receivables and
It is the integrity and the way the company manages the employees, which helps retain them and attain the desired goals. The Corporate Social Compliance Team of the company constantly providing the desired support to integrate human rights in the owned as well contracted operations of the business units. They also provide advises to the various stakeholder interactions, the standard of which is in lines with the Code of Conduct and International Corporate Social Responsibility standards. In 2013 the company had also been awarded as one of the most ethical companies around the world. (Kimberly-Clark Corporation, 2013) The aim of the K- company is to bring integrity in diversity and utilize this culture of integrity to achieve the desired goals in a cohesive
The accounting boards in each state also lay out ethical standards for membership and state law usually requires accountants to authenticate with the Council of State in order to practice law. States to punish violations of ethics that have been adopted and the state safety standards with penalties that could include suspension of the accountant’s license ( Petryni, n.d.). In the field of accounting, and based on ethics and safety standards on a broad commitment to honesty, impartiality and objectivity. Ethical standards also require that accountants information in the clearest and most accurate way possible, predicted that the information constitutes a separate report for business, the financial situation with. In most cases, this requires not only to take account of professional rules, but also to recognize the possibility of harm, using logic and judgment to solve ethical conflicts and display moral integrity and motivation for the implementation of the resolution ( Petryni, n.d.).
Therefore, this shows that there is no segregation of duties in the warehouse department where the employee have both custody and recording functions which this will increase the possibility of employee to conduct asset misappropriation. For example, the warehouse employee can steal the company’s inventory and manipulate the number of inventory to be recorded in the computer’s system in order to conceal his theft of