Running Head: Internal Controls m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m
m m m m m m m m m m m m m m m m m m m 1
3-2 Final Project Milestone One: Internal Controls
ACC 411
Southern New Hampshire University
July 17,2022
Internal Controls m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m
m m m m m m m m m m m m m m m m m m m m m m m m m m 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.
Internal Controls m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m
m m m m m m m m m m m m m m m m m m m m m m m m m m 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 instance, a robust corporate
governance framework must be adopted that focuses on confidentiality, availability and
Internal Controls m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m
m m m m m m m m m m m m m m m m m m m m m m m m m m 4
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 m
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
Internal Controls m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m m
m m m m m m m m m m m m m m m m m m m m m m m m m m 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/
