Mr Mrs Landscaping I would like to discuss your company’s internal Free Essay Example

Mr. & Mrs. Landscaping I would like to discuss your company’s internal controls. With the new program your company has purchased, I would suggest updating the controls you have in place to incorporate the new accounting system. There are some internal control procedures in accounting I would like to discuss with you. I have included in this memo some information you need to know to keep your procedures flowing correctly.

The reason I recommend updating your procedures is because of the new age of accounting fraud.

The deliberate manipulation of financial statements to generate a fake document. Sometimes involving employees, accountants or managers. An employee can falsify receipts, inventory or expenses by not recording the sale or under recording liabilities.

Please keep in mind when you are reading the following information most fraud is done on the inside not coming from outside sources. Not that any of your employees are not trustworthy, but with these accounting procedures in place and employees trained on their position with the correct checks and balance your system should proceed with minimum problems.

Separation of duties means no one person has complete control over the lifespan of a transaction. No one person should have the ability to initiate, record, authorize or reconcile a transaction. Organizations should isolate functional responsibilities. The separation of duties assures that mistakes, intentional or unintentional will not happen.

Access controls is a process by which certain employees are granted access and certain privileges to systems, resources or information. In order to use the accounting program certain credentials must be shone.

In physical systems, the best security used can’t be transferred.

Physical audits are wide-ranging physical inspection and evaluation of all security systems, controls, and their parameters in. It is the united process of accompanying intensive auditing and analyzing the results affecting to the entire physical security mechanism of any company.

Standardized documentation is used for fiscal transactions, such as invoices, internal materials requests and inventory receipt. Standard document formats can make auditing past records for discrepancy in the system easier. The absence of standardization causes items to be overlooked or misinterpreted.

Trial balances uses double entry accounting system adds dependability that the books are always balanced. Calculating daily or weekly trial balances can provide insight into the accounting system, allowing discovery of discrepancies that can be investigate and corrected as early as possible.

Periodic reconciliations ensure balances in your accounting system match up with balances for supplies and credit customers. Reconciliation also involves relating cash balances, records of deposits and receipts with bank statements. Variances amid complementary accounts can show errors or inconsistencies in your own accounts, or the errors may originate with the other entities.

Approval Authority should be given to the managers to authorize certain types of changes. Requiring approval from managers for large payments and expenses can thwart crooked employees from making fraudulent transactions with company funds. Plus, the delegation of duties will also give you the opportunity to build your company and expand into other areas.

In conclusion I hope the previous information was helpful in giving you some idea why certain procedures are needed in updating your internal controls. All those are not necessary but a combination of any of those should be able to help.