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As a consequence of COVID-19, many businesses and organisations are finding that remote working has become the preferred working alternative for many employees, even in a world no longer dominated by the pandemic.
Regardless of the type of working environment, whether that be office, remote or hybrid, maintaining strong and effective accounting internal controls is crucial.
Thus, it is important to look at the processes that could be designed to maintain accounting internal controls in a remote working environment.
Here, we discuss areas of internal controls that are most likely to be affected by the remote working environment and provide suggestions for addressing these.
The key point in the segregation of duties for functions like payroll, cash receipts and procurements is that the duties of authorisation, execution, record keeping and reconciliation should be shared. Lack of segregation of duties in these processes increases the risk of fraud or error. In a remote working environment, segregation of duties may become difficult and challenging. Here are some tips to mitigate the risk of an insufficient level of segregation of duties in a remote working environment:
In a remote working environment, the process for authorisation and approval will become virtual. Using electronic or digital signatures which require an employee to enter credentials prior to signing, enhances the integrity of the authorisation/approval. Here, we briefly explain the concepts of electronic and digital signatures.
Another consideration for authorisation and approval is the timely review of bank statements by an authorized person (i.e. CFO, Treasurer, CEO or a board member). This review helps to identify any unusual transactions from the bank accounts. Also, granting online access to monitor bank activity will act as an additional control layer over bank accounts.
Maintaining IT Security in a remote working environment requires proper maintenance and management of file servers and back-ups. Here are some tips to keep IT security for remote working:
Addressing these areas of internal controls and regular review of processes can help organisations to minimise risk exposure, regardless of working environment. In addition, keeping an open line of communication to convey the organisational values and fostering a sense of mutual trust is critical for the connectedness of employees and their commitment to the business. Sending the message about ethical behaviour as a core organisational value to employees through regular communication will set the foundation to maintain internal controls that will help the organisation in future, regardless of what that might resemble.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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