...Accountability inside the health care industry Accountability by definition can best be described as “the perception of being held answerable for one’s actions or decisions” (Gelfand, Lim, and Raver, 2004, pg. 138). Unfortunately, for some Americans the terms “accountability” or “accountability standards” appear to be nothing more than cleverly marketed buzzwords that are used to fool imprudent consumers into a believing that there is a system of proper checks and balances within American businesses (Hughes, 2004). After all, for years the American public has taken a front roll seat to watch business after business fold because their company executive were brought up on charges of accounting fraud, theft, or ethical violations (Valentine, Godkin, Page, and Rittenburg, 2008). The cynicism of these detractors is clearly understandable, considering that to date only a handful of executives have been successfully prosecuted or charged with a crime. Despite the validity of the detractors argument, there is one fact that these cynics seem to forget and that is, “the concept of accountability dates back to the time of Aristotle”, who back then, contextualized the subject in terms of justice, punishment, and social control (Gelfand, Lim, and Raver, 2004). In fact, accountability is a topic that has been closely aligned with psychology, politics, law, education, health care, and organizational behavior (Gelfand, Lim, and Raver, 2004). Indeed, accountability and accountability...
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...Management's attitude toward aggressive financial reporting and its emphasis on meeting projected profit goals most likely would significantly influence an entity's control environment when [pic][pic] A. The audit committee is active in overseeing the entity’s financial reporting policies. Answer A is incorrect. An active audit committee tends to temper management's aggressive stance. [pic] B. External policies established by parties outside the entity affect its accounting practices. Answer B is incorrect. External policies tend to moderate such management tendencies. [pic] C. Management is dominated by one individual who is also a shareholder. Answer C is correct because these noted factors tend to have an especially significant influence on the control environment when management is dominated by one or a few individuals. Such a circumstance allows management to effectively implement aggressive financial reporting and emphasize meeting profit goals. [pic] D. Internal auditors have direct access to the board of directors and entity management. Answer D is incorrect. Internal auditors tend to mitigate management's aggressive attitude. close Control environment. The control environment factors set the tone of an organization, influencing the control consciousness of its people. The seven control environment factors, which you may remember using the mnemonic IC HAMBO, are |I |- |Integrity and ethical values ...
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...important for the successful operation of our nation and democracy however not each branch is equal in the power it holds. Fundamentally the Legislative Branch contains the most “power” in the federal government for Two reasons. One the system of checks and balances leans biasedly towards the legislative branch. Lastly congress is the body if government which decides what laws will be made while the Executive branch only...
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...Controlling System Within Unilever Commerce Essay Unilever has an immovable control experience, which is agreed and frequently reviewed by the Boards. This incorporates risk management, internal control procedures and operations control which are planned to provide rational, but not complete, security that assets are refreshed, the risks facing the business are being addressed and all information required to be released is reported to the Group's senior management, including where appropriate the Group Chief Executive and Chief Financial Officer, within the required timeframe. INTERNAL CONTROL AND PROCEDURES: Unilever control framework is supported through a code of Business Principles which set values of efficiency. It needs that senior manager's in each department controls the value of internal control because they are a key to huge risk factors. The Boards have individually all the responsibility for establishing procedure to check the effectiveness of internal control and reviewing and revaluating them their effectiveness. There is a day- to- day review of effectiveness of internal control system and Unilever monitor its risks with ongoing basis. OPERATIONS CONTROLS: Operations Controls is the control in which you make sure that operations activities are carried out as they were planned. Operations Controls include following controls: Financial Control Budget Control Inventory Control Maintenance Control Cost Control FINANCIAL CONTROL: Managers at Unilever put...
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...for receivables aging analysis and Follow up of delinquent accounts. Cash Receipts Processing Flowchart: Weakness E. Unrestricted customer check endorsement - Valuation F. Unable to edit and apply discounts and correct net amount - Valuation Purchases and Accounts Payable: Weakness G. Need approval for the prepared voucher for proper -Valuation Account distribution Strengths H. Verifies details on goods received with the receiving report I. Matching control tape with purchase summary for the processed invoices Payment Processing Flowchart: Strengths J. Matching the checks with the documents, amount and remittance details K. Checks are reviewed before signing for approval. L. Cancelled checks/documents to avoid duplication. M. Mailed check directly to vendors after signing the checks. Biltrite’s strengths and weaknesses in the internal control Assertion Payroll Processing Flowchart: Weakness N. Supervisor approves employee’s time cards weekly -Occurrence Strengths O. Payroll department reconciles time cards total hours paid with payroll summary report. P. Good control in input editing for validity of employees information and worked hours. Q. Treasurer reviews checks with payroll summary report before signing and distributing checks. Other Accounting...
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...become publicly listed, LJB must follow the Sarbanes-Oxley Act of 2002 (SOX), which requires all US publicly traded companies to maintain an adequate system of internal control. Under SOX Section 404, a company must report on internal controls over financial reporting in its annual report. Four key elements must be included in this report (Smith, Ledyard;): 1. Statement of responsibility by the company management (CEO and CFO) for establishing and maintaining an adequate internal control structure and procedure for financial reporting. 2. Statement identifying the framework used by management to evaluate the effectiveness of the company’s internal control over financial reporting. 3. Management’s assessment of the effectiveness of internal controls over financial reporting. 4. Attestation by the company’s external auditor on management’s assessment of the effectiveness of the company’s internal controls and procedures for financial reporting. As the president of LJB, he and other executives and board of directors must ensure that the internal controls are reliable and effective. In addition, he must hire independent outside auditors to attest to the adequacy of the internal control system. LJB’s Proper Internal Controls To become publicly listed, LJB must ensure and maintain an adequate and effective internal control system. After evaluating LJB’s current internal controls, I have found several positive acts. First, the accountant of LJB has recently started to use prenumbered...
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...credit card slips, purchase invoices, delivery notes, credit notes, computerised cash register tapes, EFTPOS records. Step 1 is important in that it is the chief means of collecting data about the economic activities of the entity, which then must be recorded in the accounting system. The step provides a vital first stage in developing an audit trail for auditors to assess the effectiveness of control procedures in the accounting information system. Step 2 records (enters), in journals, all of the transactions about the entity from source documents developed in Step 1. This is usually done as a double entry process. The journals are important in that they provide a chronological record of the economic transactions and events that affect the entity. Step 3 posts all of the information from the journals into the entity’s ledger accounts. In so doing, financial information is reclassified into items of a like nature, i.e. into different types of assets, liabilities and equity accounts. Step 4 is performed periodically e.g. at the end of each month, whereby the ledger accounts developed in Step 3 are totalled and a trial balance is prepared. This step is important in that it provides a preliminary check on the accuracy of the double entry process. If interim financial statements are to be prepared, a worksheet may be developed outside of the accounting records to...
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...document is to discuss the internal controls and why the principle activities are important for a business to operate effectively. Our goal is to make the necessary recommendations and evaluate the system for future planning. We hope to uncover any issues that will prevent the company’s productivity. We’ll submit our recommendations to correct and improve the current system in place. In conclusion we’ll present our analysis to the President along with the recommendations needed to implement a better system of internal control. Issues: There’s an issue with too much responsibility placed on one employee. The accountant serving as the controller and treasurer creates a problem with documentation as you don’t have anyone to verify cash and revenue is accounted for correctly. It’s too easy for one employee to manipulate the books in his favor without a clear segregation of duties. The accountant is leaving checks in his office during the week exposing sensitive information and increasing the risk of theft in the office without securing the checks prior to leaving for the weekend. Access to petty cash is not regulated effectively due to lack of security and poor documentation. There’s a lack of human resource presence in order to complete a competent interview process and extensive background checks on all employees prior to employment. The infrastructure of the company has...
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...2013 Hello LJB Company President: First, I would like to thank you for hiring my accounting firm to evaluate LJB’s internal controls system. This report will inform you of any new internal control requirements required for LJB to go public, advise you of what the company is doing right, recommend that LJB purchase an indelible ink machine and advise you what areas the company can improve. Introduction After observation LJB’s operations, I have determined LBJ needs to make changes regarding its internal controls system. All publically traded companies operations’ must comply with the Sarbanes-Oxley Act (SOX) accounting standards. As cited in by Kimmel (2011), complying with the internal controls practices set forth by the SOX act prevents fraud, encourage efficiency and effectiveness of operations, and insure a company is in compliance with applicable laws. The internal control standards outlined by the SOX act include a control environment, risk assessment control activities, information, communication and monitoring. NEW INTERNAL CONTROL REQUIREMENTS FOR GOING PUBLIC Sarbanes-Oxley Act of 2002 (SOX), enacted on July 29,2002, is a United States Federal law that imposed new rules and regulations for all US public companies. Under SOX Section 404, all publicly listed corporations are required to maintain an adequate system of internal control. Under SOX, Corporate Executives and the board of directors are personally responsible for making sure that the internal...
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...Safeguarding leave and payroll documents from theft, loss and destruction; and ▪ Internal controls are simply good business practices. The benefits of good internal controls are: ▪ Prevents errors and irregularities from occurring. If errors or irregularities do occur, they will be detected in a timely manner. ▪ Ensures that issues arising from reporting errors are kept to a minimum and quickly resolved. ▪ Protects employees: o By clearly outlining tasks and responsibilities; o By providing checks and balances; and, o From being accused of misappropriations, errors or irregularities. What are Internal Controls? Internal controls are the practices performed by departments to provide management with reasonable assurance that assets are safeguarded and transactions are authorized, valid, complete and accurate. Internal control systems operate at different levels of effectiveness. Determining whether a particular internal control system is effective is a judgment resulting from an assessment of whether the five components – Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring – are present and functioning....
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...The importance of accountability paper HCS 475 November 3, 2014 Brandi Muro The Importance of Accountability Paper There are many aspects that play into being a good leader and manager. They are all of similar importance, however; there is one that is particularly important, accountability. Holding people accountable for their actions or lack thereof is important for many reasons. It entails the procedures and processes by which one party justifies and takes responsibilities for its actions. Accountability simply reflects the achievement of sustainable outcomes (Porter-O’Grady & Malloch, 2007). Although it is meant to be a positive process and should be a benefit for the organization, it can sometimes affect the work environment. Why is accountability important in the health care industry? In health care, accountability does not just begin with the front line providers, everyone in the organization is important to making sure everything runs smoothly. This starts from the bottom with those that order supplies and even those that register patients. If patients are registered incorrectly, they may receive the wrong treatments which could result in a very bad situation. Also, if the necessary medical supplies are not on hand, patients could again be put at risk. Unfortunately in health care, small mistakes can lead to life threatening outcomes. How is an employee’s accountability measured in the health care industry? In order for someone to be held accountable...
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...Audit Program Design ACC/546 Chandria Willis August 3, 2015 Frank G. Elliot Apollo Shoes, Inc. Langley, ME Dr Mr. Elliot, We have developed test o controls of substantive test of transactions, and analytical procedures for the audit of Apollo Shoes Inc.’s sales and collection cycle, payroll and personnel cycle, acquisition and payment cycle, and Inventory and Warehousing cycle in line with the generally accepted auditing principles. The objective is to verify existence, accuracy and completeness. A substantive test should be associated with each of the transactions related to the audit objectives. The objectives of the audit include the occurrence, accuracy, completeness, posting, classification, summarization, and timing. Analytical Procedures must be performed in the planning stage of the audit and reviewed near the end of the audit. This serves to provide additional assurance to the auditor that the account has also been presented fairly in line with the generally accepted accounting principles. Based on previous research, it is our opinion...
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...Management also needs a control system that generates reliable information for decision-making purposes. The importance of internal control to the auditor is rooted in the second standard of fieldwork. The controls that are relevant to the entity's ability to initiate, record, process, and report financial data consistent with management's assertions are the auditor's main concern. The auditor needs assurances about the reliability of the data generated within the entity's internal control system in terms of how it affects the fairness of the financial statements and how well the assets and records of the entity are safeguarded. 6-2 The potential benefits and risks to an entity’s internal control from information technology include (see Table 6-1): Benefits: • Consistent application of predefined business rules and performance of complex calculations in processing large volumes of transactions or data. • Enhancement of the timeliness, availability, and accuracy of information. • Facilitation of additional analysis of information. • Enhancement of the ability to monitor the performance of the entity's activities and its policies and procedures. • Reduction in the risk that controls will be circumvented. • Enhancement of the ability to achieve effective segregation of duties by implementing security controls in applications, databases, and operating systems. Risks: • Reliance on systems or programs that inaccurately...
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...Loss Prevention Policies Unit 5 IP Jessica Payne Loss Prevention Policies Each year companies stand to lose at least five percent of revenues to internal fraud. This may seem like a small percentage but it adds up. That five percent can be the difference between staying afloat or filing bankruptcy. When a company spends time and money to prevent fraud it is far less than running the risk of internal fraud. The most effective way to prevent fraud is to establish a proactive fraud prevention program. It is best if a company seeks the advice from a qualified fraud expert. A successful fraud prevention program requires three elements: education, investigation, and proactive preventative techniques. Most internal frauds are brought to attention from employees, customers, or vendor tips. Employees are the most likely source to provide tips of misconducts. So implementing a company-wide education program is a crucial part of a fraud prevention program (Coenen, 2011). Fraud education should focus on fraud awareness and should be presented to all employees. Investigating fraud is important to a comprehensive fraud prevention program. Although investigations are time consuming and costly the benefits are worth it. Investigations can have deterrent effects on potential thieves. Investigations send a company-wide message that management is aware and looking for fraud. Proactive fraud prevention techniques are the biggest asset in the company’s fraud prevention plan. Proactive...
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...information is fairly presented in accordance with reporting requirements such as GAAP or IFRS. The objective of effective internal control over financial reporting is to fulfill these financial reporting responsibilities. 2. Efficiency and Effectiveness of Operations Controls within an organization are meant to encourage efficient and effective use of its resources to optimize the company’s goals. An important objective of these controls is accurate financial and non-financial information about the entity’s operations for decision making. 3. Compliance with Laws and Regulations Section 404 of the Sarbanes–Oxley Act requires all public companies to issue a report about the operating effectiveness of internal control over financial reporting. In addition to the legal provisions of Section 404, public, nonpublic, and not-for-profit organizations are required to follow many laws and regulations. Some relate to accounting only indirectly, such as environmental protection and civil rights laws. Others are closely related to accounting, such as income tax regulations and anti-fraud regulations such as the Foreign Corrupt Practices Act of 1977 and certain provisions of the Sarbanes–Oxley Act. 10-2 Management designs systems of internal control to accomplish three categories of objectives: financial reporting, operations, and compliance with laws and regulations. The auditor’s focus in both the audit of financial statements and the...
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