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本科毕业论文内部控制外文文献翻译完整版中英对照
AClearLookatInternalControls:
TheoryandConcepts
HammedArad(Philae)
Departmentofaccounting,IslamicAzadUniversity,Hamadan,Iran
BarakJamshedy-Navid
FacultyMemberofIslamicAzadUniversity,Kerman-shah,Iran
Abstract:
internalcontrolisanaccountingprocedureorsystemdesignedtopromoteefficiencyorassuretheimplementationofapolicyorsafeguardassetsoravoidfraudanderror.InternalControlisamajorpartofmanaginganorganization.Itcomprisestheplans,methods,andproceduresusedtomeetmissions,goals,andobjectivesand,indoingso,supportperformance-basedmanagement.InternalControlwhichisequalwithmanagementcontrolhelpsmanagersachievedesiredresultsthrougheffectivestewardshipofresources.Internalcontrolsshouldreducetherisksassociatedwithundetectederrorsorirregularities,butdesigningandestablishingeffectiveinternalcontrolsisnotasimpletaskandcannotbeaccomplishedthroughashortsetofquickfixes.Inthispapertheconceptsofinternalcontrolsanddifferentaspectsofinternalcontrolsarediscussed.
Keywords:
InternalControl,managementcontrols,ControlEnvironment,ControlActivities,Monitoring
1.Introduction
Thenecessityofcontrolinnewvariablebusinessenvironmentisnotlatentforanypersonandmanagementasaresponsefactorforstockholdersandanothershouldimplementagreatcontroloverhis/herorganization.Controlistheactivityofmanagingorexertingcontroloversomething.heemergenceanddevelopmentofsystematicthoughtsinrecentdecaderequiredanewattentiontobusinessresourceandcontroloverthiswealth.Oneofthehottopicaboutcontrolsoverbusinessresourceisanalyzingthecost-benefitofeachcontrol.
InternalControlsserveasthefirstlineofdefenseinsafeguardingassetsandpreventinganddetectingerrorsandfraud.WecansayInternalcontrolisawholesystemofcontrolsfinancialandotherwise,establishedbythemanagementforthesmoothrunningofbusiness;itincludesinternalcheek,internalauditandotherformsofcontrols.
COSOdescribeInternalControlasfollow.Internalcontrolsarethemethodsemployedtohelpensuretheachievementofanobjective.Inaccountingandorganizationaltheory,Internalcontrolisdefinedasaprocesseffectedbyanorganization'sstructure,workandauthorityflows,peopleandmanagementinformationsystems,designedtohelptheorganizationaccomplishspecificgoalsorobjectives.Itisameansbywhichanorganization'sresourcesaredirected,monitored,andmeasured.Itplaysanimportantroleinpreventinganddetectingfraudandprotectingtheorganization'sresources,bothphysical(e.g.,machineryandproperty)andintangible(e.g.,reputationorintellectualpropertysuchastrademarks).Attheorganizationallevel,internalcontrolobjectivesrelatetothereliabilityoffinancialreporting,timelyfeedbackontheachievementofoperationalorstrategicgoals,andcompliancewithlawsandregulations.Atthespecifictransactionlevel,internalcontrolreferstotheactionstakentoachieveaspecificobjective(e.g.,howtoensuretheorganization'spaymentstothirdpartiesareforvalidservicesrendered.)Internalcontrolproceduresreduceprocessvariation,leadingtomorepredictableoutcomes.Internalcontrolswithinbusinessentitiesarecalledalsobusinesscontrols.Theyaretoolsusedbymanager'severyday.
*Writingprocedurestoencouragecompliance,lockingyourofficetodiscouragetheft,andreviewingyourmonthlystatementofaccounttoverifytransactionsarecommoninternalcontrolsemployedtoachievespecificobjectives.
Allmanagersuseinternalcontrolstohelpassurethattheirunitsoperateaccordingtoplan,andthemethodstheyuse--policies,procedures,organizationaldesign,andphysicalbarriers-constitute.Internalcontrolisacombinationofthefollowing:
1.Financialcontrols,and
2.Othercontrols
AccordingtotheinstituteofcharteredaccountantsofIndiainternalcontrolistheplanoforganizationandallthemethodsandproceduresadoptedbythemanagementofanentitytoassistinachievingmanagementobjectiveofensuringasfaraspossibletheorderlyandefficientconductofitsbusinessincludingadherencetomanagementpolicies,thesafeguardingofassetspreventionanddetectionoffraudsanderrortheaccuracyandcompletenessoftheaccountingrecordsandtimelypreparationofreliablefinancialinformation,thesystemofinternalcontrolextendsbeyondthosematterswhichrelatetothefunctionofaccountingsystem.Inotherwordsinternalcontrolsystemofcontrolslaydownbythemanagementforthesmoothrunningofthebusinessfortheaccomplishmentofitsobjects.Thesecontrolscanbedividedintwopartsi.e.financialcontrolandothercontrols.
Financialcontrols:
-Controlsforrecordingaccountingtransactionsproperly.
-Controlsforpropersafeguardingcompanyassetslikecashstockbankdebtoretc
-Earlydetectionandpreventionoferrorsandfrauds.
-ProperlyandtimelypreparationoffinancialrecordsIebalancesheetandprofitandlossaccount.
-Tomaximizeprofitandminimizecost.
Othercontrols:
Othercontrolsincludethefollowing:
Qualitycontrols.
Controloverrawmaterials.
Controloverfinishedproducts.
Marketingcontrol,etc
6.Partiesresponsibleforandaffectedbyinternalcontrol
Whileallofanorganization'speopleareanintegralpartofinternalcontrol,certainpartiesmeritspecialmention.Theseincludemanagement,theboardofdirectors(includingtheauditcommittee),internalauditors,andexternalauditors.
Theprimaryresponsibilityforthedevelopmentandmaintenanceofinternalcontrolrestswithanorganization'smanagement.Withincreasedsignificanceplacedonthecontrolenvironment,thefocusofinternalcontrolhaschangedfrompoliciesandprocedurestoanoverridingphilosophyandoperatingstylewithintheorganization.Emphasisontheseintangibleaspectshighlightstheimportanceoftopmanagement'sinvolvementintheinternalcontrolsystem.Ifinternalcontrolisnotapriorityformanagement,thenitwillnotbeoneforpeoplewithintheorganizationeither.
Asanindicationofmanagement'sresponsibility,topmanagementatapubliclyownedorganizationwillincludeintheorganization'sannualfinancialreporttotheshareholdersastatementindicatingthatmanagementhasestablishedasystemofinternalcontrolthatmanagementbelievesiseffective.Thestatementmayalsoprovidespecificdetailsabouttheorganization'sinternalcontrolsystem.
Internalcontrolmustbeevaluatedinordertoprovidemanagementwithsomeassuranceregardingitseffectiveness.Internalcontrolevaluationinvolveseverythingmanagementdoestocontroltheorganizationintheefforttoachieveitsobjectives.Internalcontrolwouldbejudgedaseffectiveifitscomponentsarepresentandfunctioneffectivelyforoperations,financialreporting,andcompliance.heboardsofdirectorsanditsauditcommitteehaveresponsibilityformakingsuretheinternalcontrolsystemwithintheorganizationisadequate.Thisresponsibilityincludesdeterminingtheextenttowhichinternalcontrolsareevaluated.Twopartiesinvolvedintheevaluationofinternalcontrolaretheorganization'sinternalauditorsandtheirexternalauditors.
Internalauditors'responsibilitiestypicallyincludeensuringtheadequacyofthesystemofinternalcontrol,thereliabilityofdata,andtheefficientuseoftheorganization'sresources.Internalauditorsidentifycontrolproblemsanddevelopsolutionsforimprovingandstrengtheninginternalcontrols.Internalauditorsareconcernedwiththeentirerangeofanorganization'sinternalcontrols,includingoperational,financial,andcompliancecontrols.
Internalcontrolwillalsobeevaluatedbytheexternalauditors.Externalauditorsassesstheeffectivenessofinternalcontrolwithinanorganizationtoplanthefinancialstatementaudit.Incontrasttointernalauditors,externalauditorsfocusprimarilyoncontrolsthataffectfinancialreporting.Externalauditorshavearesponsibilitytoreportinternalcontrolweaknesses(aswellasreportableconditionsaboutinternalcontrol)totheauditcommitteeoftheboardofdirectors.
8.LimitationsofanEntity'sInternalControl
Internalcontrol,nomatterhowwelldesignedandoperated,canprovideonlyreasonableassuranceofachievinganentity'scontrolobjectives.Thelikelihoodofachievementisaffectedbylimitationsinherenttointernalcontrol.Theseincludetherealitiesthathumanjudgmentindecision-makingcanbefaultyandthatbreakdownsininternalcontrolcanoccurbecauseofhumanfailuressuchassimpleerrorsormistakes.Forexample,errorsmayoccurindesigning,
Maintaining,ormonitoringautomatedcontrols.Ifanentity’sITpersonneldonotcompletelyunderstandhowanorderentrysystemprocessessalestransactions,theymayerroneouslydesignchangestothesystemtoprocesssalesforanewlineofproducts.Ontheotherhand,suchchangesmaybecorrectlydesignedbutmisunderstoodbyindividualswhotranslatethedesignintoprogramcode.ErrorsalsomayoccurintheuseofinformationproducedbyIT.Forexample,automatedcontrolsmaybedesignedtoreporttransactionsoveraspecifieddollarlimitformanagementreview,butindividualsresponsibleforconductingthereviewmaynotunderstandthepurposeofsuchreportsand,accordingly,mayfailtoreviewthemorinvestigateunusualitems.
Additionally,controls,whethermanualorautomated,canbecircumventedbythecollusionoftwoormorepeopleorinappropriatemanagementoverrideofinternalcontrol.Forexample,managementmayenterintosideagreementswithcustomersthatalterthetermsandcondition