Free Essay Sample on Reimbursements

Introduction

Throughout the reimbursement process, open communication lines need maintenance considering the timelines, scopes, and responsibilities. Once the relevant stakeholders agree, the final plan for the reimbursement needs to be presented to the relevant department for approval and further discussion. Maintaining approval and communication policies could increase transparency and guarantee support of the organization's performance (Chen et al., 2020). Conducting interview and reviewing existing documents help the management team have a good understanding of the reimbursement task ahead of them. They can plan a visit to understand the identity of damage at the event's material time to avoid misleading or fraudulent information.

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Monitoring Controls

Continuous monitoring is an essential step in mitigating abuse of policy. It involves automated testing of all transactions such as invoice payment to avoid double payment issue. In the case of COSO, continuous monitoring is vital to help identify the purpose for the reimbursement, determine the likely risk that could occur, and therefore put internal control measures. COSO should also adopt a framework to facilitate an increased understanding of significant internal controls and reduce the risk for all shareholders.

Management Actions

Having a strong internal control is vital to mitigate the organization's overall risk of fraud. COSO’s process requires a strategy to have a foolproof in line with standards and operating procedures. Managers need to have a clear-cut strategy that is communicated to other members and organizations to have a zero-tolerance policy toward fraud. Managers need to give direction on ensuring proper internal audit to check any discrepancies and misstatements. Additionally, the internal risk assessment is significant to identity preventive measure to reduce overall risk. Having a response plan should require the organization to modify its anti-fraud strategy for effective recovery of fraudulent fund reimbursed to the employee.

Board of Directors' Responsibility

The board of directors plays an integral role in fraud response, detection, and prevention. The main role entails turning the rest of internal investigation to law enforcement and hiring external auditors to conduct an internal investigation on the operations. Fraud prevention starts in the board room as the board of directors communicate mission, vision, and policies across the leadership to the organization's bottom level (Chen et al., 2020). However, the board of directors needs to understand the risk of fraud, procedures, and mechanisms to deploy the right personnel from outside, such as consultant, legal counsel, and forensic accountant.

Conclusion

Control environment processes set the basic standards for carrying internal control across the organization. In the case of COSO, the control environment that the company lacks is the commitment to ethical values and integrity. The principle should be communicated to all organization members to avert risks such as lack of employee accountability, systematic ethical problem as fraud, and employee unaware of internal control procedures and policies. The management should establish structure with appropriate authorities and reporting lines to enable information flow and avert issues such as employees being unaware of reporting relationship. Robust internal control and continuous monitoring of the working environment are a proper way to curb the organization's risk of fraud.

Reference

Chen, H., Yang, D., Zhang, X., & Zhou, N. (2020). The moderating role of internal control in tax avoidance: Evidence from a COSO-based internal control index in China. The Journal of the American Taxation Association, 42(1), 23-55. https://doi.org/10.2308/atax-52408.