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Internal control (COSO framework and internal control process (monitoring,…
Internal control
COSO framework and internal control process
monitoring
assessing quality of performance
address the fact that most organisations functions in a changing environment.
information and communication
identifies the need for pertinent information to be identified, captured and communicated in a form and time-frame that enables people to carry out their responsibilities.
control activities
classification of control activities
preventive control
detective control
corrective control
types of internal control activities
segregation of duties
proper authorisation of transactions and activities
adequate documents and records
safeguarding of assets and information
independent checks
risk assessment
risk assessment is management's responsibility
management have choice to either address risk or accept risk
control environment
sometimes referred to as to set the tone at the top
elements of control environment
philosophy and style of senior management
the fundamental management principles
management style approach
factors that influence risk
organisational structure(hierarchy)
the organisational structure should be suitable for the type of organisation
grouping of activities
methods used to communicate tasks and responsibilities
in other to understand the methods used by management to assign authority and responsibility to personnel the are factors to be considered
human resource management
the appointment and evaluation of personnel
personnel scheduling
regular rotation of duties, within limits
career path possibilities
the formalization of personnel practices
Exercise psychological control by striving to maintain a high morale amongst personnel
objectives of internal control
operational objectives
reporting objectives
compliance objectives
responsibility for internal contol
board of directors delegates responsibility of organisation to the management
management designs and implement IC
advantages and limitations of internal control
advantages
achieve its goals for profitability
prevent resources losses
promote reliable financial reporting
ensure compliance with legislation and regulations
prevent the reputation of the organisation becoming tarnished and the related results
limitations
ensure an organisation;s success
identify weaknesses but cannot change management from bad to good
ensure reliability of financial reporting and compliance with legislation and regulations
control in an information technology
general controls
application controls
control is either process or action taken