Implementing internal controls will help your business reach its performance and profitability targets, and most importantly prevent loss of resources. Internal Controls help to ensure reliable financial reporting, as well as, making the business comply with laws and regulations. Internal controls will help your business get to where it wants to go, and avoid pitfalls along the way.
A controlled environment with the proper supervision from upper management, as well as support from the auditing department will yield an effective internal control measure. There are many benefits that result from doing an early analysis, such as:
1. Setting the right attitude in upper management. This is the foundation for all components of internal control and for setting discipline and structure. Upper management will set the integrity and ethical values and competence of the organization's employees. Upper management's philosophy and operating style is very important since procedures are normally followed down the chain of command.
2. Building controls into the system by teaching employees to take ownership and setting up accountability control procedures.
3. Maintaining focus over risk-management to expose fraud and other errors. Every organization will face a variety of risks from sources that must be assessed and handled. Setting up internal controls to deal with risk assessment starts with the establishment of objectives that are linked at different levels and internally consistent. Risk assessment is the identification and analysis of relevant risks to achievement of the objectives, forming a basis for determining how the risks should be managed.
4. Setting... [continues]
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