Archive for May 12, 2014

Ensure controls are working as intended

In our most recent newsletter, we discussed how fraud exposure can result without internal control.

An important ā€“ and obvious ā€“ component to internal control is ensuring the controls that are established are working as intended.

One of our Clients had established internal controls for ensuring there was management oversight on accounts payable. This control required the Controller to review and approve any accounts payable transaction.

However, the Controller got busy and was not as thorough in ensuring the control was in place. Because there was not oversight, one of his Managers became creative, resulting in that Manager embezzling over $1 Million.

If the Controller had been diligent in complying with the control, the Manager would not have been able to take the money.

The lesson: internal controls need to be established AND working as intended! Routine testing of the controls help mitigate the risk.

If you would like to evaluate the effectiveness of your internal controls and/or would like assistance within testing the controls, contact Charlene Aldridge at 972.447.9787 or CharleneAldridge@aldridgekerr.com to discuss how we can assist you in ensuring your controls are in place and working as intended!!

And, be sure to sign up for our newsletter.

Internal control does more than reduce risk

Internal control reduces risk within an organization. In addition, it:

  • Creates a structured foundation
  • Allows Management to concentrate on other issues
  • Positions the organization for growth and expansion
  • Provides a methodology to evaluate its efficiency and effectiveness

So, internal control does much more than reduce risk, it provides operational effectiveness.

If you need assistance in strengthening your organizationā€™s internal control, contact Charlene Aldridge at 972.447.9787 or CharleneAldridge@aldridgekerr.com to discuss how we can assist you in improving how you do what you do.

And, be sure to sign up for our newsletter.