Internal Control Systems Maximized Through Monitoring by CPAs in Ontario

Monitoring by CPAs in Ontario

Whenever a team of CPAs performs an audit or a review engagement for a company, those team members have certain obligations. One of these obligations is to assess the organization’s system of internal control and to monitor it. Experienced Chartered Professional Accountants, and in particular, those CPAs who have a Licensed Public Accountant designation, know how to evaluate the internal control system of a business, which is defined as the activities of a company that are performed with the intent of minimizing errors, safeguarding assets, and ensuring that operations are conducted in an approved manner. After assessing the internal control system of your business, your CPA may recommend changes that will help you to mitigate risk. If the management team agrees with these recommendations, your assurance professionals will help you to set up and implement those changes. Your assurance professional will then monitor the internal control system on an on-going basis to make sure that it is happening consistently and efficiently.

What is Internal Control?

Internal control varies greatly from organization to organization, becoming more complex as a business increases in size or moves to having shares traded on the stock exchange. Some aspects of internal control might include:

  • Internal auditors. You may have employees whose job descriptions include examining processes and correcting failings in the system. 
  • Board of directors. Many companies have boards that provide oversight of the management team, examine financial statements, approve proposed new initiatives and more. The efficacy of these board structures depends greatly on the level of expertise of the individuals who sit on the board.
  • Restricted access. Access to certain areas of operations may be restricted to a small number of employees. For example, access to some computer records may be granted only to those who need the information to conduct specific tasks.
  • Cross-checks. Often internal controls ensure that more than one employee is involved in a process, so that each can cross-check the other. This helps to reduce errors and intentional fraud.
  • Locked. Cash or other physical assets may be locked, with few employees having access to them, in order to prevent theft.

Even the most stringent system of internal control, however, will not eliminate the risk of error or fraud; unforeseen incidents or unscrupulous individuals may be able to override the system. But a good Chartered Professional Accountant will assist in making your internal control system as strong as possible.

Monitoring

After your audit team has assessed your internal control system and helped you to implement any necessary improvements, a program of monitoring should be put into place. Your business should create policies that allow for regular monitoring of employee compliance with internal control policies. A good CPA will report as to whether or not the business is compliant with all internal control policies.

If you are located in St. Catharines, Niagara Region, Niagara Falls, Welland, Thorold, or Niagara-on-the-Lake, the firm of Jones & O’Connell LLP, can help you to assess, improve, and monitor your company’s internal control system. Contact them today to set up an appointment and minimize the risk to your business!