Clearer of dual reporting line in organization Essay

Clearer of dual reporting line in organization
In an entity, organizational chart is an essential framework for every staff to know who are accountable to whom. It is like a guideline on how a lower employee to reported to higher position of employee. In addition, the reporting lines regarding the entity must be clarity and clear enough in order to maintain the accountability of the company. It is important to recognition and determination of the organization structure and chart, this is to have a clear job description about the employee's responsibility and able to accountable to whom and reduce the gap and confusion of the issue of reporting to who. In the case of Barings, the management in the Singapore should have a better understanding on how the business being operated with its area of responsibility, even though the main office in London do not involved in the day to day operation of Singapore, but this is the responsibility of the Singapore to accountable to report to the related people of the London office. However, If the company is not clear or complex in the reporting line, there must be ambiguous or confusion of responsibility and accountability, it will confused the people who are in charge of this reporting structure. For an example, in the Baring report noted that due to the absence of the clear reporting line, no one is allocated to exercise his or her task to monitor and supervise what Leeson had been done in the office.
Exercise segregation of duties is a must for the internal control system to be effective
Every company should be able to realize and recognize the importance of segregation of duties to be exercise in the internal control to be effective, when build up the strong internal control, the business is more able to detect any potential downside risk in the activities. A complete segregation of duties is consisting of different independent personnel to responsible for front office and back office. In Barings, Nick Leeson was responsible for two positions, one is trader to deal with SIMEX and also handle the back office operation and daily transaction records. This showed that poor allocation of responsibility an employee and increases the possibility that he can manipulate the account. Obviously, there two jobs position should be done by two different independent people to avoid the fraudulent case being happen and can reduce the risk. Furthermore, company should review internal control regularly to mitigate the risk. Thus, top management should ensure that no single employee can be appointed to handle more than one positions especially who have in charge of finance and account position in an organization. By separate the duties, this could help to reduce risk and can safeguard company asset. management should always have a question mind through the processing of the transaction activities, accounting and report being done by lower management of people, if they are not satisfy the answer given by employee, they should immediately report to the senior management