Internal Control, Auditing, and the Automated Acquisitions System

As automated acquisitions systems become more prevalent, the importance of the issues and procedures involved in their auditing increases. This paper examines those issues and procedures, clarifies the audit process, and identifies internal controls as they relate to the automated acquisitions system. General control mechanisms, such as access to equipment, and application controls, such as segregation of functions, are described.No embarg

Effective Internal Controls for Recognizing Contracting Revenues

Business leaders of contracting companies in Qatar struggle to develop appropriate internal controls over revenue estimates to mitigate the risk of financial statement manipulation. Grounded in the internal control framework of the Committee of Sponsoring Organizations of the Treadway Commission, the purpose of this multiple case study was to explore strategies that business leaders responsible for financial reporting use to develop and implement effective internal controls for recognizing contracting revenues. Nine participants from 3 private contracting companies in Qatar who had implemented strategies to develop and implement effective internal controls for recognizing contracting revenues participated in face-to-face semistructured interviews. Through a process of methodological triangulation as described by Yin, observations and documentary evidence supplemented data collected through semistructured interviews. Different themes emerged through the analysis of data that involved coding narrative segments. The research findings included themes of control environment, control activities, systemized project budget, accounting standards compliance, and risk assessment and monitoring. Business leaders of contracting companies may benefit from the findings of this study by gaining awareness of the need to develop and implement effective internal controls for recognizing contracting revenues. Implications for positive social change could come from identifying internal controls that increase financial statement reliability, which could lead to increased access to capital and debt financing and improved employment opportunities in Qatar

Financial Accountability of Public Schools: Does the onus lie with those charged with Governance or the Department of Education?

South Africa’s education reform was focused on access, redress, and democracy. Policies like the South African Schools Act 84 of 1996 were introduced to address the imbalances in education. Legislation requires those responsible for governance within public schools to submit audited financial statements to the Department of Education. There is mounting pressure from the public on all levels of government institutions to be held accountable for their actions. The purpose was to assess if internal controls, which take the shape of policies and procedures, are present, pertinent, sufficient, running efficiently, and being monitored effectively. To further identify who shall be kept accountable with regard to the monitoring process. The article aims to evaluate the internal controls, accountability, and transparency in South African Public School’s financial practices. To investigate whether South African public schools have internal controls to preserve and assure compliance with current legal standards governing accounting and auditing processes as outlined in the South African School Act 84 of 1996. The article will apply a qualitative document analysis approach to understand the public school spending and record-keeping phenomenon in-depth. Financial statements only show numerical data and do not indicate if proper accounting and auditing procedures were followed. The findings reveal the absence of internal controls; in cases where internal controls exist, they are ineffective. This article aims to contribute to assistance in clean school audit reports. The recommendation is that the Department of Education become more involved in managing departmental funds.   Keywords: Accountability; legislation; internal controls; public schools; governanc

Strategies and Internal Control Procedures for Decreasing Fraud in Faith-Based Nonprofit Organizations

This study addressed the problem regarding the lack of strategies and internal controls in faith-based nonprofit organizations which resulted in a higher risk of fraud, waste of funds, or abuse of funds in charities, churches, and other related ministries. This risk was the result of trust by organizations that employees would not commit fraud and due to a lack of sufficient resources. This study specifically researched faith-based nonprofit organizations that are located in Texas. This qualitative case study included two faith-based nonprofit organizations located in or near Houston, Texas. The research found several themes including: frauds occur, segregation of duties, approval controls, review process, and policies and procedures. The study also found several internal controls, policies, and procedures that these organizations could implement to decrease the risk of fraud, such as a whistleblower policy, background checks, segregation of duties, review of financials, and limited access to accounting procedures. Further research could be conducted on the implementation of internal controls after a fraud was discovered and the restoration of donor trust

Dampak Penerapan Sistem Pengendalian Internal untuk Pencegahan Kecurangan Akuntansi

The internal control system helps minimize the risk of accounting fraud. With strong internal controls, companies can implement procedures that limit access and responsibility in financial management. The purpose of this study was to analyze the effect of implementing an internal control system for preventing accounting fraud. The research method used is a literature study or Library Research with a qualitative approach. Based on the literature review conducted on the results and discussion, there is a conclusion that internal control plays an important role in preventing accounting fraud in an agency. Keywords: internal control, accounting frau

Two RNA-binding motifs in eIF3 direct HCV IRES-dependent translation.

The initiation of protein synthesis plays an essential regulatory role in human biology. At the center of the initiation pathway, the 13-subunit eukaryotic translation initiation factor 3 (eIF3) controls access of other initiation factors and mRNA to the ribosome by unknown mechanisms. Using electron microscopy (EM), bioinformatics and biochemical experiments, we identify two highly conserved RNA-binding motifs in eIF3 that direct translation initiation from the hepatitis C virus internal ribosome entry site (HCV IRES) RNA. Mutations in the RNA-binding motif of subunit eIF3a weaken eIF3 binding to the HCV IRES and the 40S ribosomal subunit, thereby suppressing eIF2-dependent recognition of the start codon. Mutations in the eIF3c RNA-binding motif also reduce 40S ribosomal subunit binding to eIF3, and inhibit eIF5B-dependent steps downstream of start codon recognition. These results provide the first connection between the structure of the central translation initiation factor eIF3 and recognition of the HCV genomic RNA start codon, molecular interactions that likely extend to the human transcriptome

The effect of financial development on the investment cash flow relationship: cross-country evidence from Europe

We investigate financing constraints in a large cross-country data set covering most of the European economy. Firm level investment sensitivity to cash flow is used to identify financing constraints. We find that the sensitivities are significantly positive on average, controlling for country and industry fixed effects, as well as firm level controls. Most importantly, the cash flow sensitivity of investment is lower in countries with better-developed financial markets. This suggests that financial development may mitigate financial constraints. This effect is weaker in conglomerate subsidiaries, which are likely to have access to internal capital markets and depend less on the outside financial environment, and possibly for firms in industries with highly liquid assets as well. This result sheds light on the link between financial and economic development. JEL Classification: , E44, G31, L10Europe, financial constraints, Financial Development, Investment

Detecting Internal Control Problems Based on COSO and Islamic Perspective: Case on SMEs

Objective – The presence of Small Medium Enterprises (SMEs) has been able to be livelihoods sources and absorb more labor, even though it has a relative smaller contribution of additional value compared to the Large-scale Enterprises. The number of economic actors of SMEs spread across area from urban to rural. However, SMEs have faced several serious problems. These problems are caused by the unique characteristics of SMEs itself. First, lack of managerial skills due to limited human resources and lack of monitoring which it is rarely conducted by the manager or the owner. Second, lack of information and technology to carry out operations. Both problems have great impacts in lack of internal controls. Third, SMEs also face problems in developing business scale, limited access to capital to the banks and financial institutions due to the lack of transparency. Therefore, this research aimed to detect to what extent of the problems arising in the application and assessment of internal controls performed by SMEs.Method – The research employs descriptive qualitative research method through direct observation, interview and business documentation owned by the company. Research materials are 29 SMEs consisting of 19 trading SMEs and 10 service SMEs. All SMEs are located in Malang city. Detection of application and assessment of internal controls in this study is based on the COSO framework and the Islamic perspective.Result – Internal control activities indicators apply the five principles of COSO framework which focused on three layers. First layer is self-assessment control area. Second layer is environment control area and the third layer is independent control area. While the Islamic perspective is focused on the internal control of business activities based on the Qur'an and Hadith. The results derive from application and assessment based on COSO framework and Islamic perspectives are complementary in improving the practice of internal control.Conclusion – Internal control problems detected in this study are generally caused by lack of managerial skills due to limited human resources, and lack of monitoring which it rarely done by manager or the owner, lack of technology and information to carry out the operations and moreover the accounting information system has not been well established. The results are expected to assist management in designing and implementing effective internal control system and provide assurance of easy access to capital

Effective Internal Control Strategies for an Enterprise Resource Planning System

The lack of effective internal control over enterprise resource planning (ERP) increases risks associated with financial reporting and erroneous transactions. Business leaders who develop effective enterprise resource planning internal controls reduce the risk of fraud and improve the quality of financial reporting. Grounded in the COSO internal control framework, the purpose of this qualitative single case study was to explore strategies business leaders use for adequate internal controls. The participants were seven business leaders from a single business in Mississippi, the USA, who successfully employed enterprise resource planning and internal control strategies. Data were collected using semistructured interviews, observations, and a review of internal documents. Using Yin’s five-step thematic analysis process, three themes emerged, including internal control strategies, overcoming barriers to implementing internal control strategies, and addressing key internal control challenges. A key internal control recommendation is to routinely review role-based access controls to ascertain appropriate access to transactions. The implication for positive social change includes the potential to help a firm improve the social and cultural well-being of the community, leading to consistent employment opportunities