In: Accounting
Identify the internal control procedures classified per (SAS78/COSO) that could prevent or detect this fraud.
There are five components in the internal control procedures classified per SAS78/COSO) that could prevent or detect this fraud :
1. Control Environment : A control environment is a foundation for internal control and is creating a culture of ethics among the employees and the management. It lays the guidelines for control in the organization.
2. Risk Assessment: An organization must follow a risk assessment procedures for financial reporting i.e. identifying , assessing and taking measures to mitigate the risks involved.
3. Information and communication: The entity must use an efficient accounting information system which will enable it to prepare quality and reliable financial statements.
4. Monitoring: The organization must ensure that the internal controls laid out are functioning as intended and any gaps must be addressed.
5. Control activities: These include IT control and physical control activities to ensure that there are appropriate policies and procedures in place to address the identified risks.