This post addresses internal control and IT.
Not what you're looking for?
For internal control to be effective, it needs to be enthusiastically accepted by the management. The other components will be ineffective if the management has a tendency to override these controls. From an auditor's perspective, having a good knowledge of such practices has a significant contribution to understanding the internal controls of an organization.
Please share any experience you may have in this area.
Purchase this Solution
Solution Summary
This solution discusses the following scenario:
For internal control to be effective, it needs to be enthusiastically accepted by the management. The other components will be ineffective if the management has a tendency to override these controls. From an auditor's perspective, having a good knowledge of such practices has a significant contribution to understanding the internal controls of an organization.
Solution Preview
This is very true in regards to IT auditing. If you have never seen the GAAS standards broken down into three divisions, here is a copy of it that is pretty comprehensive: http://www.gao.gov/govaud/govaudhtml/d07731g-8.html
Basically, the main reason for internal controls in the first place is to prevent fraud and other acts of wrongdoing. The internal controls are equally important for both public and private companies, they're just aimed slightly different. For a public company, the main person we're protecting is the investor - this is why internal controls are designed, and it's because of how much money investors, as the primary stakeholder, have tied up in a company. When we're dealing with private companies, the main person we're protecting is the business owner. Private companies are limited on stakeholders and the usual makeup of stakeholders are the owner, employees, customers, and the community where the business resides. The controls, however, are designed to function the same. Now we move those ...
Purchase this Solution
Free BrainMass Quizzes
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Basics of corporate finance
These questions will test you on your knowledge of finance.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.