Government Owned Hospital Nigerian Setting -Myassignmenthelp.Com

Question Discuss About The Government Owned Hospital Nigerian Setting? Answer: Introduction The concept of fraud is not new and one of the most popularize kind of frauds that are often heard are the financial frauds. They often create a hassle in the stable financial market while hitting the goodwill and reputation of a business organsation. In todays competitive world when the access to information has become an easy task then it is quite important to have a proper control measure so that the data and financial information can be safeguarded. Internal control has become an efficient tool in such a time, these are the plans or programs implemented to safeguard the companys assets and at the same time ensuring the integrity of accounting records (Draz, 2011). It is quite important to increase the internal data security in order to remain competitive in the global business environment. The case of Queensland health is an eye opener for the other organizations regarding their internal security concerns. The report performs a critical analysis of Queensland health and also disc usses about the weakness of the organization that lead to fraud. Literature review According to Mbeba (2007), the concept of internal control has its roots in the older time period. In the middle ages, people were quite inclined towards controlling their financial documents and accounts in order to verify the use and misuse of the funds. The administrators at catholic churches were quite interested to gain detailed and correct records of their transactions, accounts and possible frauds. That is why a complex hierarchy of the ministry was created in order to tackle the issues (Graham, 2015). Internal audit and control is the review of economic activity examining financial, accounting and other operations. This helps the business entity to maintain a check on the financial and other activities. The internal auditor is one of the most overlooked actors in the financial reporting process. Internal auditors are the one that have direct access to internal controlling mechanism. They directly take part in the preparation of balance sheet and financial statements (Mbeba, 2 007). In the views of Joseph and Albert (2015), internal control plays a quite important role in the prevention of financial frauds. It is up to the management to implement an effective internal control system in order to tackle and prevent frauds. Internal control mechanism is a significant tool behind the smooth functioning of a business entity. Frauds are become quite common and in todays digitized and globalised world information has become quite vulnerable aspect. The modern tools and techniques can cause data harm and financial frauds in seconds so in order to be safe, it is important to pay attention towards internal control mechanism (Joseph and Albert, 2015). According to Petra?cua and Tieanub (2014), effective internal control measure reduces the risk of financial frauds and also ensures that the financial statements and balance sheets prepared are up to the marked standard and do not provide any misleading information to the organsation and its investors. Financial fraud in an organization can hamper its reputation and goodwill in the entire market. The investors and stakeholders lack trust in the operations of the organsation which further provide loss to the entity. The plans, policies, procedures, physical security and organizational design are all part of internal control mechanism. Internal control refers to proper procedure of recording and authorization. It varies from one organization to other organization. It is important that internal control mechanism should be based on systematic and risk oriented approach in order to ensure adequate controls in the areas of high risk. Internal control mechanism also helps in distinguishing between areas of high and low risk. This helps in proper allotment of the control measures (Petra?cua and Tieanub, 2014). In the views of Muslimat and Hamid (2012), internal control mechanism is important however its implementation is quite complex which supports in the security management. One need to monitor the quality of internal control on time to time basis as the requirement may change. Internal control plays an integral role in the success of business organsation. It is quite essential to understand which internal control regime will suit the functioning of the business entity and how to monitor the control regime. Both these aspects are quite important as they help in providing better prevention and safeguard to the organsation and its financial records. Internal control mechanism helps in providing accurate financial data which lessen the chances of financial frauds. It is the task of the internal auditor to implement internal control and also train the management to monitor the effectiveness of the control in the dynamic environment. Internal control and risk management are the two aspects th at aids in setting and achieving strategic, operational compliance and reporting objectives. Internal control mechanism in finance is quite important as it provide reasonable assurance regarding the achievement of operational objectives and also helps in providing a shield against financial frauds (Muslimat and Hamid, 2012). Internal Control Weaknesses in Queensland Health Queensland health is situated in Australia and in December 2011 the organsation identified a fraudulent transaction of $11million of public funds which was paid to Healthy Initiatives and Choices. This was the trading name that was registered in the name of its own employees Hohepa Morehu-Barlow (Barlow). Further investigation in the matter identified that this was the fraud conducted over a series of four years, which was started in October 2007. Hohepa Morehu-Barlow with the help of his known developed a fraud control program. The incident occurred in the Queensland health has raised several questions related to the internal security concerns of the organization (Fraud, financial management and accountability in the Queensland public sector, 2016). There are several loop holes in the internal security mechanism of the organization which has lead to the occurrence of the massive fraud. The internal control mechanism of the organization was not properly managed and implemented. The o rgansation has also recorded cases of theft which shows that the financial operations and their control management were not properly functioning. The staff of the organization has booked charted flights on a non working trip which shows that the finances were draining without proper knowledge of the internal auditor. The allocation of funds was not done appropriately which leads to mismanagement in the budgeting aspect of the organization. Apart from this, the major aspect of the organization in training program which was not implemented properly (Petra?cua and Tieanub, 2014). The training regarding fraud awareness was not given to the staff of the organization. It was given when an incident once occurred which means it was a reactive training program not preventive one. Queensland health has also not conducted criminal checks on their staff who were employed before 2006. The organization paid more attention on the ethical standards as a result of fraud detection work but it lacked resources which further become an obstacle in the efficient working of the internal control mechanism. Internal control mechanism is an important aspect of an organization (Petra?cua and Tieanub, 2014). Queensland health was exposed several threats of data loss and financial frauds because its internal control mechanism was not properly working and hence it has faced the financial fraud of huge amount. In addition to this the Queensland health failed to manage emergency response team which again shows ineffective implementation of the internal control mechanism. The management of the organization was not inclined towards the internal control and security measures. Internal Control Framework/S That Could Prevent Financial Fraud in Queensland Health Internal control mechanism is often underestimated in a business organization. Internal control and audit function is an important aspect and the management should give it utmost importance. The function of internal audit should be assigned appropriate degree organization independence. The autonomy to the internal audit staff and department is quite essential so that they can work efficiently (Biegelman and Bartow, 2012). The autonomy provided to the staff can help them in effectively monitoring the preparation of the financial statements. To maintain this standard it is quite important to develop transparency in the working. In addition to this it is also important to develop a sense of accountability in the staff of internal audit so that they can report to their seniors and proper action can be taken on time. In order to remain safe, it is important to maintain an internal audit function in an organsation. This can help the business entity to reduce the incidences of fraud. It is significant to formulate an internal audit committee. The internal audit committee would help ensure effective monitoring of financial statements preparation process which should be free from coercion from potential perpetrators of fraudulent recording (Cascarino, 2012). Professional certification of internal auditors is required and it is quite important to lay emphasis on the development of internal audit standards. In addition to this it is significant that companies and business organization maintain a vigilance committee which keeps an eye over incidence of frauds. The absence of such committees encourages the incidences of fraud (Dawson, 2015). In addition to this it is important that committees should review and evaluate the working of the internal audit and control mechanism. Internal audit and control me chanism helps in preventing frauds in the organization hence it is significant for the management that they should express their opinion regarding the adequacy of the internal audit and control mechanism. Importance of Studying AIS as A Core or an Elective Unit Accounting information system is typically a computerized accounting program that maintains the financial records and other data of a business organsation. This accounting principle is adopted in organization around the world as accounts auditing and financial records management mechanism. The accounting management system is adopted by the organizations of Finland and United Kingdom. The non integration of healthcare professional towards the financial aspect often creates hindrance in proper management of accounts and financial statements (Mancini, Vaassen and Dameri, 2013). In accounting g information system information is entered into the system and it keeps track of the information and also helps in organizing the accounting and other financial information a proper way. Accounting information system is designed to record all the information and transaction of the business. Accounting information system helps in generating financial records of the business organization in a click. It is important for the management to provide appropriate training to the internal audit and control department (Hall, 2015). The accounting information system is a discipline of accounting, in some universities it is being taught as a core subject while at some places it is being taught as elective subject. In todays competitive environment it is important to teach accounting information system as a core subject rather than going for elective one. Accounting is an important aspect of an organization hence it is important for every department to have a basic understanding of the accounting functions (Hall, 2015). Due to lack of appropriate knowledge amongst the staff, financial frauds occur in organsation. Therefore accounting information system should be treated as a core unit of organsation functioning and hence training program regarding the same should be imparted amongst the staff of the organization. Conclusion Internal control and audit mechanism is an important aspect in the safe functioning of a business organsation. In todays dynamic environment, data security has become one of the major concerns of business organizations working around the world. Financial frauds have become quite common due to lack of proper internal control mechanism. The report analyzed one of the most famous financial fraud cases of Queensland health which has shocked all the business organsation of the world. The report has critically evaluated the weakness of the organization due to which it has become the target of financial fraud. The organization has not paid required attention to their internal control mechanism. Apart from this the staff was also not well trained in the same aspect. There was a control mechanism but it was specifically a reactive one which is performed when the event has already occurred. It is important for the organsation to take some preventive steps so that such events cannot disturb its functioning in future. Apart from this, the business organsation should also work on accounting information system to safeguard its financial and accounting records. References Arwinge, O. 2012. Internal Control: A Study of Concept and Themes. Springer Science Business Media. Biegelman, M.T. and Bartow, J.T. 2012. Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance. John Wiley Sons. Cascarino, R.E. 2012. Corporate Fraud and Internal Control: A Framework for Prevention. John Wiley Sons. Dawson, S. 2015. Internal Control/Anti-Fraud Program Design for the Small Business: A Guide for Companies NOT Subject to the Sarbanes-Oxley Act. John Wiley Sons. Draz, D. 2011. Fraud prevention: Improving internal controls. https://www.csoonline.com/article/2127917/fraud/fraud-prevention-fraud-prevention-improving-internal-controls.html Fraud, financial management and accountability in the Queensland public sector. 2016. https://www.ccc.qld.gov.au/research-and-publications/publications/misconduct/qhealth/qhealth Hall, J.A. 2015. Accounting Information Systems. Cengage Learning. Joseph, O. and Albert, O. 2015. Effect of Internal Control on Fraud Detection and Prevention in District Treasuries of Kakamega County. International Journal of Business and Management Invention 4(1), pp.47-57. Mancini, D., Vaassen, E.H.J and Dameri, R.P. 2013. Accounting Information Systems for Decision Making. Springer Science Business Media. Mbeba, R. 2007. Market-led solutions for financial services. Internal Audit and Controls. Muslimat, A. and Hamid, K. 2012. The Role of Internal Audit Unit in Fraud Prevention in Government Owned Hospitals in a Nigerian Setting. Journal of Business and Management 2(5), pp.39-44. Petra?cua, D. and Tieanub, A. 2014. The Role of Internal Audit in Fraud Prevention and Detection. Procedia Economics and Finance 16, pp. 489 497.