Page 61 - DCOM509_ADVANCED_AUDITING

Advanced Auditing

Notes
As part of our work we developed a tailored self-assessment internal financial controls
questionnaire. We created a variety of review and evaluation procedures and we also
conducted numerous walk-through tests on the main financial transaction cycles to confirm
the understanding of the financial controls.
Our review also consisted of consultation with appropriate personnel and testing to gain
understanding of financial internal controls in place.
The focus of our review was to obtain assurance as to whether:

 Policies and procedures are clearly stated
 Adequate review processes are exercised
 Systems in operation are effective and efficient
Solution

 Documented policies or procedures covering all areas are not yet available in a
relevant procedures manual.
 No formal procedures, such as the creation of a risk register, exist with respect to the
identification and evaluation of the financial implications of business risks.
 Significant financial and non-financial risks may not be identified or assessed and
related effective controls established.
 With the aid of new procedures for self-assessment, formal documentation of controls
can be made and included in a Policies and Procedures manual.
 It is apparent from our high level review and walk-through testing, with the
exception of a number of matters identified in our report, that the organisation has
put in place a framework of processes and control procedures which will contribute
to the reliability of financial information and the safeguarding of assets.

Source: http://www.deloitte.com/view/en_IE/ie/services/enterprise-risk-services/ers-cases-studies/
74b195df7e1fb110VgnVCM100000ba42f00aRCRD.htm
4.4 Internal Control Process

Internal control consists of five inter-related components. An entity’s internal control system is
much more then entity’s record keeping procedure. It includes the elements as reflexes in
Figure 4.1 below:
Figure 4.1: Internal Control System

Internal Control System
E Control Environment E
L L
E Risk Assessment E
M M
Control Activities
E E
N Information and Communication N
T T
Monitoring and Supervision
S S

All five internal control components must be present to conclude that internal control is effective.

56 LOVELY PROFESSIONAL UNIVERSITY