ABSTRACT

This chapter demonstrates how an internal control system can guard against fraud and mistakes in hospitality management and considers a real case of fraud that was exposed via an internal control system. The sustainability of the organization is associated with close monitoring of the systems of audit and internal control. An efficient internal control system is required to minimize risk and maximize sustainability. Financial scandals that occurred in huge organizations like Enron in the late twentieth century resulted in that the interest of the academicians and the business environment is focused on the tricks and fraud. An internal control system was set up, and it worked efficiently after fraud had been identified in a hospitality management organization. The main factors in sustainability of a business are monitoring and auditing, and these are necessarily related to managerial processes. There also must be an internal audit unit to evaluate the efficiency and profitability of the internal control system.