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Investment Cycle & EFT Payment Control - Coggle Diagram
Investment Cycle & EFT Payment Control
Weaknesses & Recommendations
Weakness does not equal risk
Risk is a consequence of weakness
Weakness in Internal Control systems give rise to risk
EFT - Electronic Funds Transfer
Bank Accounts should be reconciled at least monthly. There should be a division of duties. And should be authorised by senior personal.
Recommended controls - At least 2 authorisers - multi level passwords - access controls to designated terminals for authorisation - terminal should be password protected as well - EFT's should be limited to specific days - Completeness tests should be carried out - payment audit trails must be done - payments must appear on bank statements.
Financing Activities
- the means of an entity to obtain its funding.
Owners Equity
Debenture trust deed
Prospectus
Minutes of directors meeting for approval
Share certificate
Borrowings
Minutes of directors meeting for approval
Loan / Lease contract
Mortgage bond
Journal voucher
Internal Control & Control Objectives
Internal Control
- the activities that the organisation should implement to ensure they achieve the desired objectives
Control Objectives
- the objectives that the organisation wants to achieve with every transaction. Examples: Occurrence/Validity, Authorisation, Completeness, Accuracy, Recording, Classification, Cut off and General Controls.
Investment Activities
- not many transactions, however always material
Disposals of Fixed Assets
Minutes of Board of Directors for authorisation to dispose - Sales Invoice - Removal from Fixed Asset Register
Repairs & Maintenance of Assets
Ensure repairs and maintenance are treated correctly. Ensure that there is not amounts capitalised when should be expensed and vice versa.
Additions of Fixed Assets
Capital Budgets - Fixed Asset Requisition with quote/negotiated prices - Minutes of Board of Directors for purchase authorisation - Invoice of purchase - Fixed Asset Register.
Substantive Testing
Detail Substantive Procedures
Rights and obligations
Valuation
Existence
Completeness
Presentation and disclosure
Substantive Analytical Procedures
Include comparisons of current to prior year information and ratio analysis. Comparison of financial and non-financial information.