Magazine article The CPA Journal

Internal Control: A Manager's Journey

Magazine article The CPA Journal

Internal Control: A Manager's Journey

Article excerpt

Internal Control: A Manager's Journey

By K.H. Spencer Pickett, assisted by Jennifer M. Picken

John Wiley & Sons; 2001; 384 pp.; $60 hardcover; ISBN; 0-47/-40250-8

The "accounting novel" is a fairly recent invention that is winning increasing acceptance in some colleges and universities as a supplement to traditional accounting textbooks as a way to draw greater attention to attributes such as values, ethics, analytical and interpersonal skills, and creativity. (See "A Novel Approach to Accounting Education," by Richard E. Brown and Mark J. Myring, CPA Journal, March 2002.)

In Internal Control: A Manager's Journey, the author uses that fictional approach to introduce the reader to internal control concepts and techniques, telling a tale of an organization experiencing serious systems problems, control lapses, and fraud allegations.

This volume pertains to a series of topics essential to the welfare of organizations and their employees as well as members of their boards of directors, external auditors, and business consultants. Graduate and advanced undergraduate students will find it a helpful way to appreciate the scope and importance of internal control.

The book includes detailed appendices for a managerial control system needed for all operations; the top 10 imperatives for facilitators; training course outlines for the subjects covered; and a brief risk paradigm.

The book's central character, Bill Reynolds, was recently promoted to the position of head of corporate standards. Reynolds is under significant stress as he begins to cope with his new responsibilities. During a doctor-advised vacation to Jamaica, he meets Jack Durham, an MBA-school friend of his CEO who is a business consultant.

As the two men tour the island, Reynolds discusses his work problems. He learns that Durham, a former internal auditor, is now writing a book on internal control, and Reynolds recognizes a valuable resource for developing a standards manual for his company. As the two men tour Jamaica, their dialogue centers upon internal control, which they believe will benefit both of their endeavors.

Their discourse opens with concepts of control and with control and system elements that are often tied to aspects of the Jamaican locale, such as buying mangoes and bread. The thoughts expressed include internal control as every employee's personal responsibility; the need for each employee (executive management in particular) to comprehend the importance of controls as they go about their work; and that awareness workshops can play a training role. Touched upon in a very practical vein are risk assessment and management, accepting a proper degree of risk that will allow an entity to progress, managerial control systems, basic control standards, and control frameworks. …

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