Accounting Systems and Processes

Today I am going to talk about the increase in frauds in the corporate sector in Australia. It was identified from the surveys conducted that due to pandemic situation internal controls of the organization are under pressure. Let’s understand the internal controls of COSO and impact of COVID-19 on each one of them. There are five components of COSO. These include control environment, risk assessment, information and communication, monitoring activities and external control activities. I’ll discuss each one of it in detail. Let’s start with the first one that is control environment.

Control environment helps to find out how the management has put policies and procedures in the organization and whether the people of the organization are aware of the policies and procedures or not (Chiu and Wang 2019). It is observed that due to COVID-19 policies and procedure of the organization has changed but many of the employees are unaware of them and this is creating conflicting situations at work.

Risk assessment – It helps in identifying how the organization identify the risk and assess them so that if the company can achieve all the objectives defined by it. It has been noticed that employees are getting involved in money movement, insider trading and other similar activities. Cyber risk is also increasing in the organization.

Information and communication – This component takes care how the management communicate what is expected from them by delegating the work and taking an acknowledgement from them to find whether they understand their responsibility of not (Majeed 2019). As people are working remotely, it has become very difficult to explain and communicate important information because they are not available or they miss out meetings and conference calls.

Monitoring activity – This activity helps to find how the management keeps an eye on the functioning of the organization. It also helps to monitor which things are working and which require improvement. The impact of the pandemic is severe and it is observed through monitoring activities. Management of the organization is finding it hard to manage the work.

The last component of COSO is an existing activity. It helps to know what control measures are there in the organization and where they are? Are they at the correct position, working effectively or there is a need for the change in the organization (Lawson, Muriel and Sanders 2017)? It is identified in research that despite the control measures employees of the organization are not following policies and procedures and this is decreasing the overall productivity.

The management of the organization needs to overcome the issues so that employees do not even think of doing any type of fraud with the organization. It can be done by monitoring the activities within the organization and enforcing strict rules and regulations.


To: Mrs Proactive

CEO of Cantstand Fraud ltd.


Date: 10th September 2020

Subject: Monitoring control activities to prevent and detect fraud

It has been identified through monitoring activities that the company is experiencing discrete shocks and broader day to day disruptions. Seeing the condition, it has become essential to start using monitoring and control activities to prevent fraud and corruption in the organization.

The authority members are thus planning to revisit the risk assessments and find out areas which are highly susceptible to fraud and similar activities. It will help in reviewing the functions of the organization. Moreover, it will also give the authority member opportunity to ensure continued enforcement of the changed policies and procedures amid COVID-19. The company is planning to spend time in identifying whether the automatic control systems are susceptible to failure or not. The company if required will use drones to conduct a physical observation of inventories at the physical rooms (Henry 2016). They need to think to scrutinise the access level of the employees. It will destroy the resource of access and they will now be able to access the things which they need to access during the work. The company to keep administrative accounts secure needs to put password vaults so that employees cannot use the information for their means. The company shall now start using corporate networks for conducting business. All the employees have to document the decision taken to provide temporary relief. The company will even change the role of the IT personnel’s so that they do not have the authority to access the live environment.

The company is also creating and enhancing policies and procedures for adapting the COVID-19 impact on all the control environments. It will help evaluate all the impacted areas and if required the authority members can also get in contact with the testing parties such as service auditors and so on. It is also preparing for remote testing so that a greater corporation can be maintained both inside and outside the organization. The company is also creating a new norm stating that if the control managers find it challenging, they can raise their hands and seek the help of the higher authority members (Suh, Shim and Button 2018). It is promoting open and ongoing communication with the service providers to find out if there is a need to alter the current interaction models and create a contingency plan if required. If there is a need for the change, then the company would go for it because it needs to find the fraudulent in the organization. All the activities mentioned above will help in monitoring fraud in the organization. These activities are going to commence from 11th September 2020.

In the hope these activities would help in preventing the fraudulent activities.


References for COSO Integrated Framework

Chiu, T. and Wang, T. 2019. The COSO Framework in Emerging Technology Environments: An Effective In-Class Exercise on Internal Control. Journal of Emerging Technologies in Accounting Teaching Notes, 16(2), pp.1-10.

Henry, L. 2016. Fraud prevention: An effective control environment can deter or minimize the occurrence of fraudulent activities. Internal Auditor, 73(2), pp.17-19.

Lawson, B.P., Muriel, L. and Sanders, P.R. 2017. A survey on firms' implementation of COSO's 2013 Internal Control-Integrated Framework. Research in accounting regulation, 29(1), pp.30-43.

Majeed, A.A. 2019. The role of the internal control components by the COSO framework in enhancing the quality of banking services A survey of the opinion of a sample of managers of sections and divisions and control officials in some government banks for the province of Nineveh. Tikrit Journal of Administration and Economics Sciences, 15(45 Part 1), pp.105-128.

Suh, J.B., Shim, H.S. and Button, M., 2018. Exploring the impact of organizational investment on occupational fraud: Mediating effects of ethical culture and monitoring control. International Journal of Law, Crime and Justice, 53, pp.46-55.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Accounting and Finance Assignment Help

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