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Investment & Finance Cycle / EFT Controls - Coggle Diagram
Investment & Finance Cycle / EFT Controls
Control Objectives / Internal Controls
Accuracy
recorded at invoice amount
depreciation done by pre-tested program
Recording
fixed asset ledger account
fixed asset register reconciled with ledger accounts
Completeness
numerical capital requistions
missing numbers followed up
fixed asset register
Classification
category classification
improvements capitalised and distinguised from maintenance
Authorisation
purchases and sales- mumerical capital requistion/sales document
recorded in minutes
Cut Off
recorded at date of receipt
Occurrence / Validity
Supporting Documents
record assets compared to physical assets
General Controls
fixed asset stored in permanent form
safeguarded
insured
FUNCTIONS
material transactions
legal and regulatory requirments
few transactions in reporting period
Scenario: purchasing of new equipment worth R2 million by the financial manager
Weakness
authorisation levels were not followed as there was no mention of a CAPEX comimitee or BOD
Recommendations
BOD should be involved in authorisation process
there should be a formal written proposal by CAPEX comittee
decision taken should be minuted
Risk
misuse of funds
EFT Payment Control
audit trail
recon done by a different person
completeness testing
transfers limited to a specific day
two different senior employees
multi-level passwords
DOCUMENTS
Investment Activities
fixed asset requistion with quote
minutes of BOD
capital budget
invoices
fixed asset register
general ledger account
Finance Activities
prospectus
share certificate
loan/lease contract
minutes of shareholders/directors
debenture trust deed
mortgage bond
journal voucher