Running Head: Internal Controls d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d 1
3-2 Final Project Milestone One: Internal Controls
ACC 411
Southern New Hampshire University
July 17,2022
Internal Controls d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d 2
Date: July 14, 2022
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.
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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 instance, a robust corporate governance
framework must be adopted that focuses on confidentiality, availability and integrity of data.
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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 d
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.
Thank You
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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/
