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Individual Project #3_jer_accounting

Individual Project #3_jer_accounting - RUNNING HEAD 1...

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RUNNING HEAD 1 Individual Project #3
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Individual Project #3 2 James E. Rose Jr. American Continental University Ladies and gentlemen we seem to have here is a failure to communicate. As you know during my audit I discovered that because of a weak internal control system, an adjusting entry for prepaid insurance was not recorded for the first three months of the year at the amount of $500. That is unacceptable to me and our CEO so, I must educate all of you on the limitations of the internal control system. First, I will give a brief definition of internal control systems. It is known as an integral process that is affected by an entity’s management and personnel and is designed to address risks and to provide reasonable assurance that in pursuit of the entity’s mission, the following general objectives are being achieved: executing orderly, ethical, economical, efficient, and effective operations; fulfilling accountability obligations; complying with applicable laws and regulations; safeguarding resources against loss, misuse and damage As you can see, internal control is a dynamic integral process that is continuously adapting to the changes of an organization is facing. My resource also mentions that management and personnel at all levels have to be involved in this process to address risks and to provide reasonable assurance of the entity’s mission and general objectives (Internal Control Standards Committee, 2011).
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