Auditing and Internal Controls
Effective administration of any institution requires setting up of proper management methods that can help in both identification and prevention of fraudulent activity in the firm. Understandably, to reduce the level of corruption, an effective communication framework should be available to enable proper networking of the different departments in the entity. Considerably, carry out a big project such as that of the Los Angeles unified school district requires extensive evaluation of different areas and risks to ensure high chances of success (Robbins, 2014). Additionally, to prevent the high level of fraud, the company should have employed more risk-based thinking and to encourage the internal auditors to emphasis more on the risk management in the planning process (Moeller, 2011).
The development of risk-based plans helps the firm to determine internal audit planning priorities that will enable the management to evaluate and differentiate long and short-term goals of the project. Importantly, implementing internal controls assists in facilitating efficient operations through enabling control of different aspects including financial, business, compliance and other risk evaluation strategies (Moeller, 2011). Moreover, this allows the safeguarding of assets and ensuring that all the liabilities incurred by the institution are identified and correctly documented.
Internal controls range in complexity depending on the procedures involved. According to the committee of sponsoring organizations of the Treadway Commission (COSO), these regulations affect several parts of the company including management and the board of director. In the case of the Los Angeles unified school district, some of the internal controls that should have been implemented include documentation, physical audits, approval authority, trial balance, and reconciliation (Moeller, 2011). For instance, documentation helps in filing financial transactions including invoices, inventory receipts and travel expenses used by different members of the firm while physical auditing helps in tracking down assets acquired including land.
Moeller, R. (2011) COSO enterprise risk management (2nd Ed.). Hoboken, NJ: Wiley. ISBN: 978-0470912881
Robbins, L. (2014). Forensic Strategic Solutions Uncovering Massive Fraud Using Acl Data Analysis. Acl.com. Retrieved 30 January 2018, from http://www.acl.com/pdfs/Success_Story_Business_Summerford.pdf