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Strengthening Internal Control Essay

1141 Words5 Pages

The article is written by Daniel Draz, M.S., CFE. The article focused mainly on strengthening internal controls. Strong internal control is paramount in preventing fraud. Besides, the company’s attitude towards fraud, internal controls and an ethical organizational culture are equally significant too. Today, companies with strong internal control also not exceptional from fraud. However, internal and external criminals have less chances in abusing internal control if the internal control policies, processes and procedures are enhanced. Strengthening internal control compromises broad analysis of the risks faced, the internal controls already in place and their ability to prevent fraud from happening. Internal control may be organized corporate-wide, …show more content…

The author regards relevant data saying auditors are part of the organization who plays a role in strengthening internal control. Similarly, another study from the Committee of Sponsoring Organizations of the Treadway Commission (COSO) also reveals that internal auditors are responsible for the effectiveness of the control system only and effective communication that comes across and up the organization is the key for stronger internal control. (Committee of Sponsoring Organizations of the Treadway Commission (COSO) (n.d.)).
Other than that, the author interprets that segregation of duties can enhance internal control. 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

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