ACC-1A Lecture Notes - Lecture 8: Cash Cash, Computer Fraud, Risk Assessment
Document Summary
Internal control is a process, effected by an entity"s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: Safeguard the assets against waste, fraud and inefficiency. Everyone is involved in internal control, and the ceo is ultimately responsible for it. All internal control systems have certain inherent limitations: Managers may override effective internal control systems. Collusion between two or more individuals can result in control failures. Internal control consists of 5 components for effective control over reliability of financial reporting: Control environment: setting tone of organisation, influencing control consciousness of its people. Risk assessment: identify, analyse and manage risk. Control activities: policies and procedures to achieve objectives. E. g. approvals, authorisations, verifications, reconciliations, reviews of operating performance, security of assets and segregation of duties. Information and communication: for people to carry out responsibilities. Monitoring: ongoing monitoring and assessing the quality of the internal control system"s performance and separate evaluation.
