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Unit 2.5 Health And Social Care

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2.3.5.2 IC reporting, Section 404, Charities Act 2006 requirements Section 404 of the Act (Charities Act 2006) requires annual reports to contain an internal control (IC) reports emphasising the responsibility of management for establishing and maintaining adequate IC over financial reporting. In addition, the annual reports should contain an assessment of the effectiveness of the IC over financial reporting. It is a requirement to aid external auditors to report on this assessment, having carried out independent testing of the control system. Appendix 4 (Table 4 and 4.1) summarises the existing charity reporting and accounting requirements set out by the CC. Appendix 7 in a Flowchart: Eligibility requirements for independent examination. The Tables consist of details of the charity size and the reporting requirements for the filing of its annual accounts and reports. If adhered to by the various charities in their respective group will help in improving reporting within the sector. 2.3.5.3 Effect of Internal Control Deficiencies Expressly, poor internal controls cause an …show more content…

The effective use of IA departments causes less dependency and or reliance on external auditing. Ineffective use of this department can create reliability of the external audit firm, high costs for use of their services. Ideally, effective auditing should be done twice a year, consist of a short period of attendance; whereas, if it is possible for charities to have an internal auditing department, auditing will be carried out as often as every three months and the likelihood of any mismanagement of funds will be greatly reduced and this lead to gradual abolition. For effective IFC practices, various functions should be implemented to address each area so that effective operations are in place and at the same time reduce

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