The authorization in BankIt should have been under a responsible person.The Board of Banking supervision also established that there was no segregation of duties in the BankIt Company under Smith. Segregation of duties according to Spencer and Pickett (Spencer Pickett & Pickett, 2001, p. 20) refers to the separation of the various roles and responsibilities, such that an individual cannot process and record complete transactions from the start to finish without being checked by someone else. It is stated that Smith held two positions, the head of settlement operations and Floor manager. These positions were supposed to be held by different people but the weak internal controls of the company allowed it. The two positions held by Smith allowed him to be able to hide his losses that the company had incurred because of his doings. Segregation of duties is always complimentary to the activities of another individual and that the doings of an individual should be subjected to independent inspection.The BankIt management failed to install the arithmetic and accounting controls within the accounting department. This procedure ensures that all the transactions are accurately and correctly recorded and therefore accuracy and correctness of the accounting records (Leitch, 2008, p. Smith would report to BankIt in London that he had incurred profits while the truth was that he had incurred losses. If this measure had been in place, he would not have been able to hide the losses that he had caused the company. Due to the absence of the accounting and arithmetic measures Smith was able to make gambles in the futures markets at BankIt Futures. BankIt Financial Institution.
Anthony, R. N. 1970. The management control function. . (pp. 14-17). Harvard Business School Press.
Biegelman, M. T., & Bartow, J. T. 2012. Executive Roadmap to Fraud Prevention and Internal Control: Craeting a Culture of Compliance. John Willey & Sons.
Chenhall, R. (2003). Management control system design within its organizational context: Findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28(2-3), 127-168.
Harrer, J. (2008). Internal Control Strategies: A Mid to small Business Guide. John Willey & Sons.
Hightower, R. 2008. Internal Controls Policies and Procedures. John Willey and Sons.
Johnson , R. A. 1976. Management, systems, and society : an introduction.
Leitch, M. 2008. Intelligent Internal Control and Risk Management: Designing High-performance Risk Control System. Gosher Publishing.
March, J. G., & Simon, H. A. (1958). Organizations. (pp. 9-11). Wiley.
Mockler, R. J. 1970. Readings in Management Control. Century-Crofts.
Otley, D. 1994. Management control in contemporary organizations: towards a wider framework. Management Accounting Research, 5.
Spencer Pickett, K. H., & Pickett, J. M. 2001. Internal Control: A Managers Journey. John Willey & Sons.
Tseng, C., & University of Maryland .2007. Internal Control, Enterprise Risk Management, and Firm Performance. ProQuest.
Please type your essay title, choose your document type, enter your email and we send you essay samples