'Internal Control Procedures\r'

'The internal support governance should be designed to detect and prevent fraud, errors and omissions, and real(a) mis asseverations, but it can only provide average assurance that the financial statements are free from veridical misstatements. The best designed internal control placement will not prevent heed revolutionise or collusion. The internal controls system is only as good as the management support slow the system; this includes training employees and actively monitoring the controls. management should be investigated, explained and corrected as appropriate.\r\nEach of these internal. interior control procedures are the responsibility of management. Each control should be evaluated based on risk and a cost/benefit analysis. There are several(prenominal) effective low cost procedures that can be implemented. These control procedures, when operating effectively, will provide conceivable assurance that mistakes will be either prevented or detected. Examples of contr ols that would have ensured that the prepaid adjustments were made would be to gather up a check-list of recurring monthly journal entries, than as part of the financial statement review process, this check-list should be reviewed by management.\r\nAt each financial statement date, each balance sheet account is reconcile; this will ensure that each balance is supported. solely reconciliations should be reviewed and approved by management. Finally at each financial statement date, flux analysis should be performed by comparing the actual results with both prior period actual and the budget. All variances in spite of appearance a tolerance threshold defined by control procedures are manual processes, which can be implemented with proper staff training Symptoms of a inadequacy of internal control include distress of management in exercising proper overdue care and proper staff supervision.\r\nThese symptoms can be set by missing documentation and identified errors in the accoun t balances; and the lack of a company-wide moral philosophy policy. (Herrera, 2010) Another symptom is that there is an identified lack of segregation of duties; which means that staff members have ingress and are performing tasks that are in contradiction to the normal assigned duties. We identified that the adjusting entries for prepaid damages were not recorded for the branch 3 months of the year. For the first three months, expenses were understated which means that net income was overstated, alike current assets were also overstated.\r\n'