An analysis of the Internal Controls used in the Finance department at COLFIRE. Research Questions
How are internal controls used at COLFIRE?
How does COLFIRE use internal control to operate their operations? 3.
What are the major internal controls principles used at COLFIRE?
COLFIRE. (Colonial Fire and General Insurance Company Limited.)
I would like to thank my teacher Mr. N. Cooper for giving me the necessary information to assist me in the formation of this internal assessment. Also my external teachers, Mr. Lawrence for giving me the encouragement I needed. Most of all, I would like to thank the secretary and the other employees of the finance department for taking the time involved, in assisting me in my internal assessment, such as the various clerks, representatives and of course the manager for giving me his permission to do so. Lastly, I would like to thank my parents in giving me the encouragement to complete this important project.
In accounting Internal Control is defined as “a process affected by an organization's structure, work and authority flows, people and management information systems that are designed to help the organization accomplish specific goals or objectives” (cited by Anderson, Chris. Writing Accounting Procedures for Internal Control, Bizmanualz, November 17, 2008). Additionally by investigating internal controls, observance was used and applied additional theory of how a locally insurance company still initiates in their cultural practices to suit their short and long term expectations which so ever reflects on each department including the finance department. This paper would explore the pros and cons of Internal Controls. So too, this paper seeks to present the ways in which an insurance company i.e. COLFIRE utilized the various internal control principles effectively to execute their objectives. At present, COLFIRE’S financial department uses all six (6) principles, but two-thirds (2/3) of those six (6) are mainly targeted and used more effectively, i.e.: 1. Segregation of duties,
2. Establishment of responsibility,
3. Documented procedure and
4. Physical and mechanical control.
COLFIRE’s expectations on the uses of Internal Controls are to: 1.
conduct its business in an orderly and efficient manner, 2.
safeguard its assets and resources,
deter and detect errors, fraud, and theft,
ensure accuracy and completeness of its accounting data,
produce reliable and timely financial and management information, and 6.
Ensure adherence to its policies and plans.
AIMS & OBJECTIVES
To identify the Internal Control principle that is being used in the finance department at COLFIRE. 2.
To present the Internal Controls in that department and the benefits they offer. 3.
To investigate the internal controls used in the process of receiving cash and cash payments for COLFIRE.
To identify procedures used to document cash receipts and payments at COLFIRE.. 2.
To evaluate the internal controls in place to safeguard the company’s cash receipts and payments.
Purpose of study
This topic was chosen because COLFIRE has been operating with the smooth running of the Internal Control systems and to the fact that Internal Controls systems play an effective role in the going concern of the business, and is of dare importance to achieve certain goals/ objectives. Additionally, all financial institutions experience drawbacks and seek ways of minimizing such in the lowest way possible. So too, this will help add to existing knowledge about the revised investigation on the pros and cons surrounding COLFIRE‘s financial department.
For this paper, primary and secondary sources of data were used. A questionnaire based on both open-ended and close-ended questions was handed out through random...
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