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Controls and activities of Investment and Financing cycle and EFT Payment…
Controls and activities of Investment and Financing cycle and EFT Payment Controls
Investing and Finance Activities
Raising of finance (funds) and the repayment
Interest and dividends
Application of funds raised for the acquisition of assets
Characteristics:
Material transactions
Rquires substantial funding.
Few transactions
Governed by legal and regulatory requirements.
Investment Cycle
Documents:Capital budgets
Fixed Asset requisition with quote/negotiated prices
Repair and maintenance of assets.
Fixed Asset register
Disposals of fixed assets
Capex Committee
Additions of fixed assets
Financing cycle:
Subsequent repayment of capital sum
Interest charged on borrowings
Declaration of dividends.
Documents: Minutes of
shareholders/director
Share buy backs;
Share certificate
Issue of shares
Mortgage bond
Internal controls and Control objectives:
Accuracy: All fixed assets are recorded at the correct amount and are
arithmetically correct
Recording: All transactions i.r.o. fixed assets and depreciation are correctly
recorded
Completeness: All valid fixed assets are recorded and nothing is omitted.
Cut off: All purchases and sales of fixed assets are recorded in the period to
which it relates.
Authorisation: All purchases and sales are authorised according to company policy.
Occurrence/Validity: All recorded assets are valid (really exist) and are supported
by proper documentation.
Classification: All transactions i.r.o. fixed assets are correctly classified
according to its nature.
General Controls: Assets are properly safeguarded against theft and physical
elements.
EFT payment controls:
Access to EFT payments should be limited to one computer
Audit trail;
Terminal should shut down after 3 unsuccessful access attempts of logging in
Payment should reflect on the bank statement;
Proper access controls over the terminal
Bank reconciliation should be performed
Multilevel password
