Ask the Accounting Community

  • 1.  Evaluating Internal Controls in our Company - Where to start?

    Posted 10-15-2014 10:42 AM
    We are a small manufacturing company looking at our internal controls.

    Is there a practical guide that we can start with?  Something along the lines of a check list? 

    Thanks!

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    Thomas Mastel CMA, CPA
    Accountant
    Ideal Aerosmith
    Grand Forks ND
    United States
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  • 2.  RE: Evaluating Internal Controls in our Company - Where to start?

    Posted 10-16-2014 08:02 AM
    Hi Thomas,
    You might want to review the references that are available on the COSO website, http://www.coso.org/guidance.htm.

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    Tara Barker
    Community Relations
    IMA
    Montvale NJ
    United States
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  • 3.  RE: Evaluating Internal Controls in our Company - Where to start?

    Posted 10-26-2014 11:54 AM

    First, some thoughts:-

    1. What are the critical work activities and processes that result in an output satisfying your customer needs on a consistent basis?

    2. Discipline over the work activities that ensure success, including improvements will also be the source for the accounting records producing the management accounts evidencing the performance of the organisation in financial terms.

    3. It is the 'management system' that directs work activities delivering the product to the customer. Parts of this system are the requirements for the accounting records          and its ultimate financial statements. All are based on the principle of factual information.

    4. Controls should be focused on the requirement to fulfil customer's satisfaction on a continuing basis. Management must be aware of 'tomorrow - the unknown', the path to its future.

    From this overview, control considerations:-

    1. To be directed, within prescribed boundaries, for the individual to produce output consistent with the purpose of the organisation and its customers resulting in mutual success and needs.

    2. To effectively optimise the use of the organisations resources within the capability/competence of the workforce. Training and development programmes to support the organisation to continually improve.

    3. From the principle of 'open involvement of all employee's (this includes management)' controls are focused on conformity to achieve success for all stakeholders.

    Specifics.

    For the price of $76 there is a comprehensive handbook written by David Hoyle which includes all the 'why's?', self assessment, the  262 requirements for a management system and 125  questions under the challenge of 'food for thought'. Don't be put off by its title "IS0 9000 Quality Systems Handbook" but note instead the following statement, "Using the standards as a framework for business improvement".

     



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    Clifford Moggs CMA
    Consultant
    Reading
    United Kingdom
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