What are some areas that might require internal controls at your organization? How does the Sarbanes-Oxley Act of 2002 affect the preparation and control of financial statements? Why can't ethics replace internal controls?© BrainMass Inc. brainmass.com December 15, 2020, 3:48 pm ad1c9bdddf
What are some areas that might require internal controls at your organization?
Control is the "final link in the management functions" (Robbins & Coulter, 2005, p. 459) and in which planning can occur throughout the organization. They will help them adhere to their strategic plan and quickly and efficiently and correct any variations or errors that have occurred.
Thus management control system is critical to any organization, because without it the results could be chaotic. Internal control programs are critical to any organization, because without it the results could be chaotic. They help ensure that actions are taken to address risks. Control activities are an integral part of an entity's planning, implementing, reviewing, and accountability for organization's resources and achieving effective results.
Some areas where internal control is required in our organization:
? Management of human capital,
? Controls over information processing,
? Physical control over vulnerable assets,
? Establishment and review of performance measures and indicators,
? Execution of transactions and events,
? Accurate and timely recording of transactions and events,
? Accountability for resources and records
How does the Sarbanes-Oxley Act of 2002 affect the preparation and control of financial statements?
Officially titled the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called SOX or Sarbox, it was signed into law on July 30, 2002 by President Bush. The act covers issues such as establishing a public company accounting oversight board, auditor independence, corporate responsibility and enhanced financial disclosure. The Sarbanes-Oxley Act's major provisions include:
* Certification of financial reports by CEOs and CFOs
* Ban on personal loans to any Executive Officer and Director
* Accelerated reporting of trades by insiders
* Prohibition on insider trades during pension fund blackout periods
* Public reporting of CEO and CFO compensation and profits
This discusses the internal controls at organization