Accuracy and reliability are paramount in the accounting world. Without accurate accounting records, managers cannot make fully informed financial decisions, and financial reports can contain errors. Internal control procedures in accounting can be broken into seven categories, each designed to prevent fraud and identify errors before they become problems. Separation of Duties Separation of duties involves splitting responsibility for bookkeeping, deposits, reporting and auditing.
How to Write a Summary of an Article? The law firm wrote opinion letters supporting the legality of the deals Enron was making even though they were illegal.
The firm was a major business partner of Enron and some Arthur Andersen executives accepted jobs with Enron. Some believe there was a conflict of interest. It is also believed Andersen was influenced to destroy auditing documents because of the large consulting fees Enron paid them.
Also, Merrill Lynch, one of the largest investment banking firms, was also a contributor. He is also reported dumping 39 percent of his Enron stock before the company disclosed its financial troubles. We would all like to believe we would have done the right thing and report the company and its CEO as well as the CFO.
I know that I would have not stayed with a company I thought was acting unethically.
If I had been hired to audit Enron, I would certainly not have swept things under the rug, destroyed documents or accepted bribes. I do not believe this behavior helps anyone in the end. If there would have been some honest reporting and accounting the company would have most likely been successful.
However, due to greed and selfishness the company was driven into collapse.Internal Control and Shady Accounting Practices; Enron: What Caused the Ethical Collapse; Enron: the Smartest Guys in the Room We will write a custom essay sample on Enron’s Questionable Accounting Practices specifically for you.
for only $ $/page. Order Now. Jennyfer from PhDessay. Hi, I am Jennyfer from PhD Essay. Additionally, accounting and auditing practices by firms and individuals associated with a particular entity, or provide other services to any or such entities are prohibited to prevent conflict of interest, and accurate reporting of accounting practices.
Relevant criteria for distinguishing ethical from unethical accounting practices are if the accounting practice materially changes what the average investor values the company at and items addressed in GAAP and other accounting standards that are against conventional accounting guidelines actively used and unchallenged in the business landscape.
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Quiz & Worksheet - Internal Controls in Accounting Quiz; Limitations of Internal Control in Financial. Internal controls are the mechanisms, rules and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability and prevent fraud. Internal Controls Best Practices.
Accounting Timeliness. Segregation of Duties Duties within the department or function should be separated so that one person does not perform processing from the beginning to the end of a process. Duties that should be Internal Audit Created Date.