Running Head: Internal Controls bb b bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb
bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb 1
3-2 Final Project Milestone One: Internal Controls
ACC 411
Southern New Hampshire University
Internal Controls bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb b bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb
bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb 2
Subject: Evaluation of the internal controls of Robbins Network Solutions
Internal Controls of Robbins Network Solutions
Robbins Network Solutions (RNS) operates in the highly competitive and dynamic
market involving computers and networking products. An audit plan is created for the
organization to ensure that there exists proper internal control within the organization. A
detailed analysis of the business environment of RNS has been carried out. Additionally,
the focus has been laid on the typical business transactions that are performed by the firm.
The business risks that arise before RNS have also been identified. The impact of the
current events on the risks and internal controls of the firm in the future have been
analyzed. The memo also sheds light on the potential ethical issues that may arise for the
firm and the types of internal control that must be adopted to maintain ethical and
professional practices.
Major financial business transactions
The chief financial business transactions that RNS is involved in include the selling
as well as installation of computer systems and networking software and hardware
components. In addition to making these offerings in the market, RNS provides information
technology consulting to diverse business entities. At present, the company has been
focusing on designing its computer networking software that will be sold to the customers.
By aggressively marketing the services and products of the business, the firm carries out its
major financial business transactions. While conducting business transactions, it is
imperative for firms to maintain proper evidence such as cash memos, invoices, salary
slips, etc.
Internal Controls bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb b bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb
bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb 3
Highest business risks
RNS encounters a broad range of risks and threats while conducting its business
activities. Some of the major risks include high competition from top market players such
as Dell, Apple and Hewlett Packard (HP) and high expenditure relating to advertising of its
products and services in the market. The unpredictability that exists in the macro
environment also increases the level of uncertainty for the form. For instance, a major
downturn in the U.S. economy could impact its financial performance and market demand.
Other risks that arise for RNS include the possibility of credit losses exceeding sales
benefits and the lack of viability of software development initiatives of the business. As the
industry in which RNS operates is influenced by evolving technology, the degree of risk is
high. Businesses that involve technology are prone to high risk and uncertainty (Samimi,
2020). Competition is a major risk that could adversely affect its market share and
profitability.
Appropriate types of internal controls for the industry
Internal controls can be categorized into detective, corrective and preventive. Each
of them plays a distinctive role in an organizational setting (Types of internal controls.
Finance & Accounting, 2021). In the computer products and technology services industry,
there is a need to have in place appropriate internal control mechanisms. Such control
mechanisms are critical since they can offer reasonable assurance about the operations,
reporting, as well as compliance dimensions while conducting an audit process. In the
specific organizational context, preventive internal control measures must be adopted so that
proper actions can be taken before the occurrence of fraud or erroneous activities. For
Internal Controls bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb b bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb
bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb 4
instance, a robust corporate governance framework must be adopted that focuses on
confidentiality, availability and integrity of data. Preventive internal controls are suitable in
the specific industrial setting since they can act as a barrier and block undesirable events or
occurrences from taking place. Some of the key steps that can be taken are authorization of
bills and invoices, verification of the expenses, etc. (DiNapoli, 2007).
Ethical Issues
A number of ethical issues are related to the RNS company that could have a direct
impact on the outcome of a financial audit process. One of the main ethical issues is the
unethical behavior of the two stockholders who are actively involved in the organizational
transactions. There is a possibility that they could focus on their personal interests and
gains. The organization gives preference to staff members that possess high technical
expertise and skills. Such a staff selection and hiring procedure could adversely affect the
financial activities, including the manner in which the transactions are recorded and
maintained. For resolving the first ethical issue, all the stockholders must take part in the
business activities so that the possibility of fraud can be reduced. Similarly, the hiring
process must be made flexible so that employees with adequate financial knowledge can be
hired.
Current events impacting RNS’s risks and internal controls in the future bb
Some of the current events that could impact RNS’s risks and internal controls in
the future include cybersecurity issues, changes relating to laws on taxes and accounting
principles. Additionally, regulations relating to the use of technology can also impact the
risks that it encounters and the manner in which it adopts internal control measures.
Internal Controls bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb b bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb
bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb 5
References
DiNapoli, T. P. (2007). Standards for internal control. New York State Government.
Samimi, A. (2020). Risk management in information technology. Progress in Chemical and
Biochemical Research, 3(2), 130-134.
Types of internal controls. Finance & Accounting. (2021). Retrieved July 14, 2022, from
https://www.fa.ufl.edu/directives/types-of-internal-controls/
