Accounting Systems and Assurance Assessment: Internal Control and information quality
Accounting students learn how to process, analyse and use accounting information. It is also necessary to learn what contributes to the quality of accounting information. Internal control is one of the factors that enhance financial reporting integrity leading to the quality of accounting information of a firm. Toshiba, a 140-year old Japanese company, was recently accused of providing misleading information of its earnings. This gives rise to questions about the deficient role of Toshiba's internal control.
Required:
(i) Undertake a review of literature to define internal control and explain the role of internal control in financial reporting integrity. Refer to at least 4 academic journal articles.
(ii) Write a brief history of Toshiba.
(iii) Investigate and explain the internal control issues leading to misleading information of Toshiba's earnings.
(iv) Using your knowledge of different internal control frameworks, explain what you would suggest for effective internal control for assuring the quality accounting information to stakeholders.