Question

300 WORDS REQUIREMENT!!!

Review the basic control concepts and why a code of ethics and internal controls are important.

Answer 1

Reviewing of the control concepts means reviewing the mission, philosophy and vision, the Audit process etc which helps the organization procedures and internal controls so that controls that reduce the risk can be identified as well as the missing controls.

Importance of the code of ethics:

1. Code of ethics is important as it defines the behavior expected in certain situations and therefore when a good code of ethics are put in place it ensures that the individuals hold themselves at the highest standards in any behavior or action.
2. The presence of the code of ethics prevents any unjust treatment meted out to any individual as any society or organization there are instances when a lot of wrong doings or acts happen . The presence of a good code of ethics sees to it that there is no bias or inequality in any way in the organization.
3. The presence of the Code of ethics promotes social responsibility. A good code of ethics ensures that the people in the organization or in the society are responsible for the individuals or the things around them.
4. A good code of ethics brings out the best in everyone .It brings out higher standards and excellence in everyone and ensures that the whole environment itself functions better as a whole.

Importance of the internal control:

1. Internal controls play a very pivotal role in the company’s success.
2. Internal controls reduce the risk of asset loss and contributes to the generation of information that is accurate and complete and financial statements that are reliable. Presence of internal controls ensures that all operations are conducted as per plans.
3. When risk management identifies threats that an organization is faced with , the presence of internal controls provides reasonable assurance of the achievement of the objectives with regards to the operations in an effective and efficient manner.
4. Establishing internal controls in the organization aid in preventing and reducing frauda and thefts in the organization.
5. The internal controls in the organization helps in separation or the segregation of the duties of the employees in the organization. This ensures that there is a system of checks and balances.