Justification for an Internal Control System Paper

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Justification for an Internal Control System Paper

JUSTIFICATION FOR AN INTERNAL CONTROL SYSTEM PAPER

Justification for an Internal Control System Paper

University of Phoenix
ACC544 Internal Control Systems
Michelle Caron
August 2, 2010

Justification for an Internal Control System Paper
Internal Control Systems are a vital part in a company’s risk management.   They protect the company from loss or misuse of assets and help the company keep on track with its mission and objectives.   As a controller, our job is to support management and their accounting and financial information and reporting.   Insurance and portfolio approaches are the beginning steps in a cohesive internal control system.   To further protect the company from risks, the company should encompass a complete internal control system.
Controller Perspective
A controller is an employee who supports management with accounting and financial information regarding organizational goals and controls.   With a focus on financial controls and processes, a controller oversees all aspects of the accounting and financial activities, information, and data for the company.   The better internal control system in place, the more reliable the information provided by the controller.
Insurance Approach
Some companies believe that as long as they have insurance, then they are covering themselves against risks.   Unfortunately, companies cannot ensure all risks.   Companies obtain insurance to cover the risks of fire, flooding, accidents that happen on their premises, and damage to their equipment and facilities.   With insurance, the company is expecting a certain minimum loss against the probability of a catastrophic loss.   One of the biggest risks that cannot be covered by insurance is risk to the company’s reputation.   It takes years to build a superior business reputation and it can only take a day to destroy it.
Portfolio Approach
A portfolio approach involves creating an understanding the company, their interactions, and their goals.   Understanding...
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