Internal ControlsInternal control is all of the policies and procedures management uses to achieve the following goals. Show
ResponsibilityManagement Responsibility: Administrative management is responsible for maintaining an adequate system of internal control. Management is responsible for communicating the expectations and duties of staff as part of a control environment. They are also responsible for assuring that the other major areas of an internal control framework are addressed. Staff Responsibility: Staff and operating personnel are responsible for carrying out the internal control activities set forth by management. Framework for Internal ControlThe framework of a good internal control system includes:
Internal Control Activities and Best PracticesInternal control activities are the policies and procedures as well as the daily activities that occur within an internal control system. A good internal control system should include the control activities listed below. These activities generally fit into two types of activities.
Click on the links below for information regarding these activities including best practices.
Other Internal Control Best PracticesWith a good internal control system in place, other considerations to keep in mind include:
Additional InformationWashington State Office of Financial Management's guide to internal control and auditing Which of the following controls can minimize the threat of inaccurate or invalid general ledger?Which of the following controls can minimize the threat of inaccurate or invalid general ledger data? Restriction of access to general ledger.
Which of the following controls is designed to ensure that after updating the general ledger?Which of the following controls is designed to ensure that after updating the general ledger, assets have debit balances and liabilities have credit balances? Sign check. An adjusting entry that is made to reflect the exchange of cash prior to performance of the related business activity is called a(n): Deferral.
What control procedures should be used to reduce the risk of unauthorized?What control procedure(s) should be used to reduce the risk of unauthorized disclosure of the financial statements? create a standard adjusting journal entry file. Identify the year the SEC will require American companies to switch from U.S.-based GAAP to IFRS as the basis for preparing financial statements.
Which feature in an ERP system provides the same capability as the journal voucher file for use in audit trails?The same capability is provided by the business workflow features in ERP systems, which make it easy to trace every step performed in processing a transaction.
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