Management oversight on internal controls and communication is a key in successfully implementing the financial strategies of any organization. Management cannot do every single aspect in the company, and must rely on communication and ethical conduct to get business done.
Management oversight and authorization are a part of corporate governance, which includes internal controls, this is done by setting and monitoring financial goals and maintaining reliable accounting journals and ledgers, as well as setting an ethical tone starting with upper management.
An example of a failed authorization is when an unauthorized employee approves vouchers or uses the login information of another employee, this type of behavior can be used for fraudulent entries or transactions. A successful authorization is when there is a segregation of duties from authorization to asset custody and recording in the journal, this should be done by three separate individuals to maintain the integrity of the transaction and lessen the chance of errors, theft, and fraud.
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