内部控制外文翻译.docx

1、内部控制外文翻译河北大学毕业论文(设计)外 文 翻 译 原文来源：Research Paper, July 2009, Social Science Research Network 中文译文：内部控制透视：理论与概念学 院 专 业 姓 名 学 号 指导教师 年 月 日A Clear Look at Internal Controls: Theory and ConceptsHammed Arad (Philae)Department of accounting, Islamic Azad University, Hamadan, IranBarak Jamshedy-NavidFaculty

2、 Member of Islamic Azad University, Kerman-shah, IranAbstract: internal control is an accounting procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error. Internal Control is a major part of managing an organization. It

3、comprises the plans, methods, and procedures used to meet missions, goals, and objectives and, in doing so, support performance-based management. Internal Control which is equal with management control helps managers achieve desired results through effective stewardship of resources. Internal contro

4、ls should reduce the risks associated with undetected errors or irregularities, but designing and establishing effective internal controls is not a simple task and cannot be accomplished through a short set of quick fixes. In this paper the concepts of internal controls and different aspects of inte

5、rnal controls are discussed.Keywords: Internal Control, management controls, Control Environment, Control Activities, Monitoring1. IntroductionThe necessity of control in new variable business environment is not latent for any person and management as a response factor for stockholders and another s

6、hould implement a great control over his/her organization. Control is the activity of managing or exerting control over something. he emergence and development of systematic thoughts in recent decade required a new attention to business resource and control over this wealth. One of the hot topic a b

7、out controls over business resource is analyzing the cost-benefit of each control. Internal Controls serve as the first line of defense in safeguarding assets and preventing and detecting errors and fraud. We can say Internal control is a whole system of controls financial and otherwise, established

8、 by the management for the smooth running of business; it includes internal cheek, internal audit and other forms of controls.COSO describe Internal Control as follow. Internal controls are the methods employed to help ensure the achievement of an objective. In accounting and organizational theory,

9、Internal control is defined as a process effected by an organizations structure, work and authority flows, people and management information systems, designed to help the organization accomplish specific goals or objectives. It is a means by which an organizations resources are directed, monitored,

10、and measured. It plays an important role in preventing and detecting fraud and protecting the organizations resources, both physical (e.g., machinery and property) and intangible (e.g., reputation or intellectual property such as trademarks). At the organizational level, internal control objectives

11、relate to the reliability of financial reporting, timely feedback on the achievement of operational or strategic goals, and compliance with laws and regulations. At the specific transaction level, internal control refers to the actions taken to achieve a specific objective (e.g., how to ensure the o

12、rganizations payments to third parties are for valid services rendered.) Internal control procedures reduce process variation, leading to more predictable outcomes. Internal controls within business entities are called also business controls. They are tools used by managers everyday. * Writing proce

13、dures to encourage compliance, locking your office to discourage theft, and reviewing your monthly statement of account to verify transactions are common internal controls employed to achieve specific objectives.All managers use internal controls to help assure that their units operate according to

14、plan, and the methods they use-policies, procedures, organizational design, and physical barriers-constitute. Internal control is a combination of the following：1. Financial controls, and2. Other controlsAccording to the institute of chartered accountants of India internal control is the plan of org

15、anization and all the methods and procedures adopted by the management of an entity to assist in achieving management objective of ensuring as far as possible the orderly and efficient conduct of its business including adherence to management policies, the safe guarding of assets prevention and dete

16、ction of frauds and error the accuracy and completeness of the accounting records and timely preparation of reliable financial information, the system of internal control extends beyond those matters which relate to the function of accounting system. In other words internal control system of control

17、s lay down by the management for the smooth running of the business for the accomplishment of its objects. These controls can be divided in two parts i.e. financial control and other controls.Financial controls:- Controls for recording accounting transactions properly.- Controls for proper safe guar

18、ding company assets like cash stock bank debtor etc- Early detection and prevention of errors and frauds.- Properly and timely preparation of financial records I e balance sheet and profit and loss account.- To maximize profit and minimize cost.Other controls: Other controls include the following:Qu

19、ality controls.Control over raw materials.Control over finished products.Marketing control, etc6. Parties responsible for and affected by internal controlWhile all of an organizations people are an integral part of internal control, certain parties merit special mention. These include management, th

20、e board of directors (including the audit commit tee), internal auditors, and external auditors.The primary responsibility for the development and maintenance of internal control rests with an organizations management. With increased significance placed on the control environment, the focus of inter

21、nal control has changed from policies and procedures to an overriding philosophy and operating style within the organization. Emphasis on these intangible aspects highlights the importance of top managements involvement in the internal control system. If internal control is not a priority for manage

22、ment, then it will not be one for people within the organization either.As an indication of managements responsibility, top management at a publicly owned organization will include in the organizations annual financial report to the shareholders a statement indicating that management has established

23、 a system of internal control that management believes is effective. The statement may also provide specific details about the organizations internal control system.Internal control must be evaluated in order to provide management with some assurance regarding its effectiveness. Internal control eva

24、luation involves everything management does to control the organization in the effort to achieve its objectives. Internal control would be judged as effective if its components are present and function effectively for operations, financial reporting, and compliance. he boards of directors and its au

25、dit committee have responsibility for making sure the internal control system within the organization is adequate. This responsibility includes determining the extent to which internal controls are evaluated. Two parties involved in the evaluation of internal control are the organizations internal a

26、uditors and their external auditors.Internal auditors responsibilities typically include ensuring the adequacy of the system of internal control, the reliability of data, and the efficient use of the organizations resources. Internal auditors identify control problems and develop solutions for impro

27、ving and strengthening internal controls. Internal auditors are concerned with the entire range of an organizations internal controls, including operational, financial, and compliance controls.Internal control will also be evaluated by the external auditors. External auditors assess the effectivenes

28、s of internal control within an organization to plan the financial statement audit. In contrast to internal auditors, external auditors focus primarily on controls that affect financial reporting. External auditors have a responsibility to report internal control weaknesses (as well as reportable co

29、nditions about internal control) to the audit committee of the board of directors.8. Limitations of an Entitys Internal ControlInternal control, no matter how well designed and operated, can provide only reasonable assurance of achieving an entitys control objectives. The likelihood of achievement i

30、s affected by limitations inherent to internal control. These include the realities that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures such as simple errors or mistakes. For example, errors may occur in designing, Maintain

31、ing, or monitoring automated controls. If an entitys IT personnel do not completely understand how an order entry system processes sales transactions, they may erroneously design changes to the system to process sales for a new line of products. On the other hand, such changes may be correctly desig

32、ned but misunderstood by individuals who translate the design into program code. Errors also may occur in the use of information produced by IT. For example, automated controls may be designed to report transactions over a specified dollar limit for management review, but individuals responsible for conducting the review may not understand the purpose of such reports and, accordingly, may fail to review them or investigate unusual items. Additionally, controls, whether manual or automated, can be circumvented by the collusion of two or more people or inappropria