Justification for an Internal Control System

The principle purpose for internal controls is to control the risk to the business of financial loss or misstatement. The current method of internal controls is a combination of insurance and portfolio controls. Although adequate, the current method of internal controls does not fully capitalize on the resources and capabilities of a full internal control system. This paper will review the existing control scheme, and the benefits of the new internal control system compared to the existing control scheme.

Existing Control Scheme

The existing internal controls focus risk mitigation efforts on insurance and a distributer portfolio. Insurance risk mitigation recognizes that the best laid plans will sometimes fail. This failure is...