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Lesson 2 Control objectives and internal controls (Objective) --> …
Lesson 2
Control objectives and internal controls (Objective) --> Internal control
Occurrence / Validity
Recorded assets are valid
Fixed asset req. & cpital budget
Compare to physical aeset
Authorisation
Authorized according to company policy
Auth. by senior management or on a numeral req. / sale doc,.
Rec. in minutes
Completeness
Valid assets recorded, nothing ommited
Capital req. are numerically accounted for (seq. number)
Missing numbers followed up
Accuracy
Recorded at correct amt. and arithmetically correct
Depreciation and other calcs done by computer program that has been tested before
Recording
Fixed assets are correctly recorded
Correct amounts
Reconcile asset register with acocounts
Classification
Correctly classified according to its nature
Fixed assets classified to company policy
Improvement capitalized, distinguished from maintanance
Cut off
Record in period in which they relate
Date of receipt (GRN) Goods received note
Date in which owner and risk transfers to new owner
General controls
Fixed permanently (bolted down)
Limit access
Protect from physical elements
Insured