What Is An Internal Control Assessment For?

If you want to make sure your internal control system is operating effectively, you could hire a financial forensic accounting firm to perform an internal control system assessment. This assessment will show how well your system is set up and working, and it will reveal any holes in the system that need to be addressed. Getting an assessment completed each year is a great way to prevent fraud within your organization.

Examination and test of the current system

The first step of an internal control assessment is identifying and examining the control procedures in place. Your company's internal control procedures should be written down, and your employees should fully understand what these are.

During the assessment, the forensic accountants will first determine if you have the right controls in place for your organization. For example, they will examine how your company handles bank deposits. If the person that prepares the deposits is the same person that makes the deposits, the accountants might suggest changing this.

Preventing problems is a goal of an internal control system, and one way to do this is by limiting the power each employee has within the organization.

By examining the procedures you currently have in place, the accountants may find loopholes in the system, but they can also find these by performing tests. Tests are done by randomly choosing invoices, bills, or checks and tracing them back. This is a common method used during audits, and it is done randomly to see if everything checks out.

Recommendations for the future

The main objective of an internal control assessment is to make sure your company is handling its financial tasks in ways that prevent fraud from occurring. Because of this, an assessment of your company's internal controls will result in a list of recommendations for the future. The accountants will not force you to make these changes, but the recommendations are designed to offer better control over your finances.

An example of a recommendation they may suggest is implementing a computer system that requires your employees to log in with individual usernames and passwords. This is a great way to control what each person does on the computers, and it offers a paper trail you can use if fraud is suspected.

There are numerous steps involved with an internal control assessment, and getting one can help you better protect your company. To learn more about these, contact a firm that specializes in financial forensic accounting services (or visit sites like http://www.eppsforensics.com).