Internal controls are mechanisms or policies adopted by management in order to protect assets, ensure accountability, improve efficiency and prevent fraud (Helms, 2018). It is a process implemented to prevent workers from stealing items or fraudulent conduct. It is important to have internal controls at every level of an organization or business. Besides protecting assets belonging to a business, internal controls assist in streamlining operations (Helms, 2018).
Physical controls
One of the internal controls that my coworker might attempt to circumvent is physical controls. The coworker hides merchandise picked from the retail company that we work for and takes them home without being detected. Besides supervisors who oversee employees and few cameras, there are no other ways of identifying cases of theft at the retail company. That is why my coworker goes undetected. In order to prevent theft that is as a result of circumventing physical controls, the company should install more cameras. In addition, the company should install garment sensors which can be of significant help in preventing stealing.
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Establishment of Controls
The other internal control that my coworker might circumvent is establishment of controls. The coworker has the habit of freely using any cash register when checking out clients. He does not use the register allocated to him throughout his shift. As a result, some money goes missing in one of the registers. In order to prevent the theft, my company should use a system whereby an employee is allocated work on a given register in a shift using his/her employment Identity Card. This can be of great help because if any money goes missing, it is easy to identify the person responsible for the money lost.
In conclusion, the recommendations can help prevent circumventing of internal controls, ensure that operations are streamlined at the company and prevent fraudulent conduct among employees. This is crucial in preventing loses for the business caused by stealing and fraudulence (Helms, 2018).
References
Helms, G. L. (2018). Purchasing, inventory, and cash disbursements: Common frauds and internal controls . Durham, NC: Association of International Certified Professional Accountants, Inc.
