Introduction
Retail Company Inc a well renowned publicly traded retail facility seeks to minimize risk and maximize shareholders wealth. Retail Company Inc in an effort to comply and align corporate governance implements recommendations by Committee of Sponsoring Organization of the Treadway Commission.
Managing enterprise risk across the entire industry of retail requires managers to address internal controls. An internal control regulates preventive, detective and corrective purposes. In the recent years, scandals imposed requirements by federal, state and local governments to inflict laws, compliances, and acts to discourage unethical decision-making.
This paper identifies policies, reporting practices, reviews, audits, cost of compliance and conflict of interest strategies that companies contend with to meet fiduciary obligations. As well as corporate governance defined as structure and the functioning of corporate policy- discrepancy between management and the shareholders in exercising control thus achieving the right balance between managerial discretion and small stakeholders’ protection. Consequently, firms develop an optimal balance considering other constituencies and stakeholders (creditors, employees, suppliers, clients, investors) of the firm (Murphy & Topyan, 2005). In the process, enterprises implement audits to maintain an ethical environment and enforce codes to deter wrongdoings.
Distinguish among preventive, detective, and corrective Internal Controls
Preventive controls defined as measures to discourage errors or irregularities (Indiana University, 2004). ...