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Finance and Internal Controls

In: Business and Management

Submitted By Godshall29
Words 688
Pages 3
Finance and Investment Controls
Just as all cycles discussed in this proposal the finance and investment cycles are vital to the return of borrowed assessments and the value (and longevity) of the company. Corresponded or intertwined to that of the investment cycle and business cycle, the Finance cycle deals with the company’s ability to pay back investors and entities that have facilitated finance to the company’s mission and vision. The finance cycle commences from the initial moments of obtaining investments to the moment they are paid off. The investment cycle extends the point of investment to the time the investment is no longer receiving any cash flow. Both the finance and investment cycles include processes such as the paying off of dividends, changes in and maintenance of fixed assets, and dealings with short and long term investments as well as liabilities. As previously stated finance and investment are initiated at the dawning of a company’s very existence so establishment of internal controls and the auditing of those controls should be designed as necessary.
Investing in a venture is based on a sense of faith and hope. Investors believe (by persuasion of course) that the product and/or services a venture provides has potential to succeed but hope to profit them a return on their investment from that success. Investment fraud, in return, is a stakeholder’s nightmare. The unfortunate thing about investment fraud is that half of the time it is not intentional. Lack of proper and necessary internal controls can cause grave loss for investors. The avoidance of this is primary to the necessity of proper internal controls. Controls to be established involving the Finance and Investment cycles include Existence, Rights and Obligations, Completeness, and Valuation and allocation. These controls are essential for the testing of transactions of Account

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