The Need To Review Internal Controls In The Public Sector.
Internal controls include all the policies and procedures adopted by an entity to assist in their objectives of achieving, as far as practicable, The orderly and efficient conduct of the entity including * Adhering to internal policies
* The safeguarding of assets
* The prevention and detection of fraud and error
* The accuracy and completeness of the accounting records and * The timely preparation of reliable financial information. Internal controls is a key element of the Foreign Corrupt practices Act (FCPA) of 1977 and also The Sarbanes Oxley Act of 2002, which require improvement in Internal controls in the United State public sector.
3.0 Problem Statement
Directors and those charged with governance, after putting in the controls, mostly fail to review it. Controls when put in place and it is not constantly reviewed does not solve the problem or detect it. Human beings someway or somehow will find a way around it and without a constant review to check the loopholes, Then the controls is as good as not being implemented. Internal controls are also limited due to fraudulent collusion of workers or management; Doing things that contravene laid down rules.
The 1st objective is to access how internal controls are implemented in the public Sector. The 2nd is to access how the controls are reviewed.
The 3rd is to test the effectiveness of the controls.
5.0 Literature Review
The Internal Control System is supported in two basic parts, which are Procedures and Controls. The procedures can establish the necessary performance of the organization through the operation; meanwhile, the controls are applied to ensure the conducted procedures of the business. The Internal Control System allow the management to determine the conditions of the system that can damage the entire organization,(Brewer and List, 2004)...