Benefits of Internal Controls Essay

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Internal Controls
Internal controls are measures that are an essential part of the business and financial procedures and policies of a company. These controls help to enhance the accuracy of accounting records, reliable financial reporting, compliance with the applicable laws and regulations, and efficient operations by reducing the risk of unintentional mistakes, intentional mistakes, and misrepresentations (Weygandt, Kimmel, & Kieso, 2008). Internal controls also assist with safeguarding the assets of a company from employee unauthorized use, theft, and robbery.
The 2002 Sarbanes-Oxley Act changed the way companies do business. This act put in place guidelines to help strengthen the weaknesses in the internal controls of companies
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Internal Controls
Internal controls are measures that are an essential part of the business and financial procedures and policies of a company. These controls help to enhance the accuracy of accounting records, reliable financial reporting, compliance with the applicable laws and regulations, and efficient operations by reducing the risk of unintentional mistakes, intentional mistakes, and misrepresentations (Weygandt, Kimmel, & Kieso, 2008). Internal controls also assist with safeguarding the assets of a company from employee unauthorized use, theft, and robbery.
The 2002 Sarbanes-Oxley Act changed the way companies do business. This act put in place guidelines to help strengthen the weaknesses in the internal controls of companies (Weygandt, Kimmel, & Kieso, 2008). The act requires companies to implement internal control provisions to meet the requirements of the SOX act which help to minimize the occurrence of unethical behavior and corporate fraud. The SOX act also includes reporting requirements for companies that help ensure proper revenue recognition.
A company that announces deficiencies in its internal controls would most likely experience a fall in the price of its stocks because this could be an indication of either mistakes or misrepresentations in its accounting practices and leads to the belief that financial statements released earlier are different than reported. The announcement of deficiencies causes a lack of faith in the operations of the company which

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