The next move: Internal Control Standards

We are talking about accounting reports standards, the GAAP, SME-FRS etc. All these may not be the remedy at all if there is no internal control. "Executives say poor internal controls contribute most to fraud" is a proof that we should know.

Some may realize that big corporations should be better. But, remember the biggest frauds are related to big corporations. If a corporation has internal control on paper, it is just window dressing only.

Due to my project, I always have the same questions to explain. Why my accounting module does not have invoicing function? Yes, there are lots of accounting programs with invoicing functions. The reason is simple. I understand internal control and the accountants should not handle invoicing. That is the basic management unless it is a one-man company. Some may say that SMEs cannot afford to have two employees to handle accounts and invoicing. I shall not complain anything because these SMEs will not have the insight to manager, not to say developing at all.

When topic like management is mentioned, HK people always supposed that the SMEs in mainland China would be lack of any system. But there is a rule in mainland China that cashier and accountant must be handled by different employee. Why? Money and accounts with the same employee is the top cause of fraud.

I can neglect this problem and follow the others. It is a simple task as I have been working with custom programming for years. But I cannot accept that my products would lead to frauds. Same as before, I have to be responsible to the clients as a company. If I do not care about this, I should be rich years ago. The only drawback for me is the 'know'. Ignorant may be the better way for business. Get the money and do not care whether the product will lead to damage fro others.

Of course, I shall work on the Invoicing as a separate module. Simple invoicing program or traditional stock control is not suitable for today. That is why I need further investigation to come up with a better design for invoicing etc.

It has been mentioned already internal control will be another part of understanding the healthiness of a corporation. I believe that this will be other standards for SMEs.