School of Accountancy
Companies today face a number of risks, such as environmental liabilities, losses from misuse of derivatives or harassment suits, which underscore the need for better control systems. Clearly, there is a tradeoff between having too much versus too little control. However, in addition to the amount of control, the mix of controls is important in maintaining the right balance within an organization. A framework is proposed that should help managers determine the appropriate matching of control types and control levels in their organizations. The matching is discussed for both traditional companies and modern, information-age companies.
Review of Business