Chap 14 Blog :)

Summary:

Internal control is very important in businesses, since a business should not take chances about its employees' honesty and dedication. It's a primary step for the business to protect itself from scams and such. If a business gets ripped off by one of its employees, reporting the crime to the police seems an obvious answer, but it seems like that's not the case. A detective in Saskatoon finds out that a lot of cases where the employees do scam the businesses, but the business does not report it. The reason was it was not reported was because it was simply more work for them. After finding this out, the police try to promote reporting these internal frauds, cause if they don't get punished for what they do, it would not stop.

Connections:

In chapter 14, internal control is made to protect the assets of a business. But without the businesses reporting the internal fraud that happens to their businesses, it makes the other businesses to not be as cautious, thus making them another victim of internal fraud. Even though the internal control seems to be a pretty good defence from internal scam it does not mean it doesn't happen. If a employee were to have a good idea of how the accounting system works, they could easily weave a path for them to gain a profit. But if a business were to be cautious with all their employees and follow the fundamental rules of a good internal control, then internal fraud would not happen as easily.

Reflection:

As a student learning about accounting, the textbook that describes the internal control makes it seem invincible, and very safe. But if people were to not report these cases of internal fraud, those who haven't experienced it will continue to think that way, and would not be cautious at all. That is why reporting these cases are very important, even if it is more work, since not only send a message to all the frauds that the businesses are aware of it, but they are also more cautious.