Internal Controls and the Sarbanes-Oxley Act of 2002 Essay examples --

In order to be successful in business, a fraternity must be able to track their assets. This introduce system is typically done by a bookkeeper and must be reliable in order to be effective. The way a attach to ensures their financial records ar reliable is by setting up a system of internal experiences. Internal controls allow a company to cheer its assets from fraud and theft as well as ensuring records are unplowed accurately by reducing faults and irregularities (Keisco, Kimmel and Weygandt, 2008). Internal controls work by delegate responsibility, separating duties to provide checks and balances, hiring an independent check-out procedure agent and through the use of engine room and physical controls. In many instances, internal controls are enquired and overseen by the Sarbanes-Oxley Act of 2002. Assignment of responsibility for certain functions of the bookkeeping and accounting do work ensures that when a problem occurs a specific someone is accountable . This, in turn, provides an inducement to that person to do their job correctly because any issue or problem will be their sole responsibility. Splitting duties has a equivalent impact on employees. By providing a system of checks and balances, i.e. one person keeps the records while an opposite keeps the assets, the chance for fraud is greatly decrease and square mistakes are easily caught. There are many physical, mechanical and electronic controls that provide further safety for a companys assets. These imply passwords, safes, alarms, security cameras, time clocks and locks (Kiesco et.al, 2008). The use of an auditor or other third party to independently verify the bookkeeping and accounting procedures performed by employees adds another layer of safeguarding to a companys inter... ... track the error to the fraudulent employee. In conclusion, internal controls include separation of duties, assignment of responsibilities, third-party verification and the use of mechanic al and physical controls. In and of themselves, these tactics stop and celebrate much abuse of the bookkeeping and accounting systems. The addition of Sarbanes-Oxley requirements in 2002 require that a company enact internal controls and assign responsibility of the control system to executives and directors, further providing insurance that financial reporting is accurate. Without this insurance that reports are accurate, company stock will fall and investors will be lost. pull down with intrinsic limitations, the positive aspects of good internal controls far outweigh the detrimental implications. Good internal controls equal accurate financial records and future company success.