A Case Study about Framework for Organisational Control Principles
Abstract: Just as organisations have goals describing their primary business objectives, they also have goals with respect to controlling how these objectives are met. These are the control goals of an organisation which are enforced through a system of internal control. Such a system enables them to adhere to external laws and internal regulations, prevent and detect fraud and continuously enhance the overall quality of the business. Independent of the type of organisation, these internal control systems use common underlying principles to establish and achieve control over business activities.
Introduction: Error and fraud can lead to losses of any kind. Identifying, establishing and maintaining the appropriate controls can help to prevent and detect such errors and fraud. When Nick Leeson brought down Barings Bank after running up losses of £862 million on unauthorised trading in derivatives, a lack of control became painfully obvious. However, at least in the ﬁnancial area little seems to have been done, as is documented in the case of John Rusnak, alleged to be responsible for a £500 million fraud when trading currencies at an US subsidiary of Allied Irish Bank in early 2002. When interviewed about Rusnak’s case, Mr. Leeson said that the deals at Allied Irish Banks’ US subsidiary showed similarities to his own 1995 scandal in Singapore.
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