... Both types of controls are essential for an effective internal control system. A control conscious environment is also necessary. It is an environment that supports ethical values and business practices. Management is responsible for "setting the tone" for their areas and encouraging the highest levels of integrity and ethical behavior, as well as exhibiting leadership behavior that promotes internal control and accountability. The following steps are examples of this leadership behavior: * Communicate to employees that fraud and conflicts of interest will not be tolerated. * Communicate to employees that policies and procedures are important and will be followed. * Make employees fully aware of their responsibilities, including internal controls. * Monitor the internal controls system on an on-going basis (Washington University, 2004). Adequate internal controls in the accounts payable (AP) process are critically important to protect against fraud. While the recent accounting debacles and the enactment of the Sarbanes-Oxley ...

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