The organization communicates with the outside parties concerning the matters which affect the roles of the internal controls. Control objectives 13. The organization normally selects and then improves the control activities which contribute to the modification of the risks to the accomplishment of the objectives to the satisfactory levels. 14. The organization chooses and improves the overall control activities over the technology in order to support the accomplishment of objectives.
He can neither transfer job to others nor avoid it. Thus, the concerned employee needs to accomplish given job himself. It develops the feeling of self responsibility among the employees. Effective management It is a bureaucratic form of organization structure. In this organization, there are specific rules, regulation, policies and working system.
Internal control plays an important role in accounting. According to the Committee of Sponsoring Organizations (COSO) Internal Control-Integrated Framework, internal control is define as a process affected by an entity’s board of directors, management and other personnel which designed to provide reasonable assurance regarding the achievement of objectives in effectiveness and efficiency of operations, reliability of financing reporting and compliance with applicable laws and regulations. Through internal controls’ policies and procedures, management can acquire reasonable assurance that the company follows the procedures in accordance with achieving its objectives and goals. A poor internal control procedures might result in a company’s failure.
Negative Impact of Organizational Change over Employees An organization may need to bring changes to its structure or business model due to financial, operational or strategic reasons. Despite the nature of reason, the employees mostly face difficulties in adapting to implemented changes which may result in creating chaos at the lower level. It is always beneficial to assess the reaction of employees to the proposed changes in advance to reduce the risk of unnecessary stress to the workers as well as mitigate the probability of failure to the organization. 2.5.1. Mental
They must also guide staff members to behave in accordance with the code of Ethics, furthermore identify Ethics risks in the organization. They must establish ways to reduce risks and address potential contraventions of the code of Ethics. Managers and supervisors must take appropriate action to correct behavioral deviations and enforce disciplinary action when appropriate. As managers and supervisors, another requirement is to ensure that their staff members are in possession of the code of Ethics. Staff members must be sensitized to the code of Ethics through staff dialogue sessions.
Referring to Mills (1993:84), it also figured out the similar argument that competence of auditor can be observed from two factors: knowledge and behavior in which knowledge itself is related to education, skills and experience. The result of education, training and experience will lead to knowledge and skills. Somethings in the system, sub-systems and application may be reduced, such as inaccurate records, improper accounting methods, poor business interruption and decision making, violation of laws or regulations, increases on costs, loss of capitals and competitive positions of markets, due to the entering of competence of human resources (Sawyer et al, 2006: 113). The function of internal audit should be independent in which the internal auditors have to aim on the objective in proceeding their works and tasks. The independence of the firms refers to the situation of the internal audit function while the auditor’s objectivity refers to the individual’s mental attitude.
A vital obligation of the internal auditor’s capacity is to screen the execution of an entity 's controls. At the point when acquiring an understanding of internal control, the examiner ought to acquire an understanding of the internal audit capacity sufficient to recognize those internal audit exercises that are pertinent to arranging the audit. The degree of the strategies important to acquire this comprehension will change, contingent upon the way of those exercises. The auditor usually ought to make request of fitting administration and internal audit staff about the internal auditors '— a. Hierarchical status inside the substance. b.
When internal control is weak, challenges will come to exist in the entity’s operation like the susceptibility of an entity to be penetrated by cyber-attacks. But the responsibility of formulating an effective internal control will always accrue to the organization, hacktivists will always crack whenever they want same as true to saboteurs, as long as there is an opportunity, they will grab it to gain financial and/or personal advantage. According to the Auditing and Assurance Standards Council (2007), control environment as a component of internal control plays an important role in order for an enterprise’s internal control to become effective, for it sets a tone that will stimulate its employees to behave in accordance with the ethical principles and to abide with the enterprise’s policies. With an effective control environment, the enterprise can reasonably prevent misconduct due to the exercise of unethical practices and address issues related to internal cyber-attacks or sabotage. In connection to the above issues, this technical paper shall identify the main reasons why do hacktivists has the ability to gain unauthorized access to an enterprise’s information system.
Project managers must deal with such risks in a most flexible and economic manner so as to minimize losses of project profitability. Another way of tackling the issue of the importance of control is by examining project failures in order to identify the most effective project control rules. For example, a survey was carried out among 1,450 companies in the public and private sectors (Whittaker, 1999). The main conclusion was that lack of risk management was the most highly ranked factor contributing to project failure. Other contributing factors were lack of required team skills and lack of control.
Internal controls typically deal with approval and authorisation processes, access restrictions, transaction controls, account reconciliations and physical security. These procedures often include the division of responsibilities, and checks and balances to reduce risk. Cyber-security policies and procedures should be documented, communicated to the users and most imported should not be a hindrance to achieving the objective of the entity but an enhancer. Cybercrime detection: Detective controls must attempt to detect undesirable acts that have occurred. These controls monitor and provide information on what went wrong.