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ISCA: Q3 - Coggle Diagram
ISCA: Q3
ACL DATA STRUCTURE
Data Type
Numeric: Cost per unit, selling price per unit
SIGNIFICANT IMPACTS OF ERRORS IN ACL DATA STRUCTURE ELEMENTS ON THE ACL AUDIT PROCESS
Inaccurate Analysis & Reporting
Incorrectly categorized fields - analysis will be meaningless & inaccurate - result in
inaccurate calculations, aggregations, and summaries
Auditor may
draw incorrect conclusions or miss anomalies
, making the
audit process unreliable
Data Integrity & Reliability Concerns
Inconsistent formats can
compromise the integrity and reliability of the information
being analyzed
ACL may
fail to identify fraudulent activities or unusual patterns
- increases the
risk of fraud going undetected
POLICY PRACTICED BY A COMP
Invoice Approval Process
Sales Managers
may have approval authority for
smaller amounts
(range: ?)
Business Managers
may have authority for
larger amounts
(range: ?)
Order Processing Time
The order processing time takes around
how many days
Short processing time = efficient & increase cust satisfaction
No Duplicate Invoice No
Can
identify specific transactions easily
Helps
prevent errors
and maintains the integrity of the sales record
WEAKNESSES OF INTERNAL CONTROL IN A COMP
Limited Approval Consistency Monitoring
Weaknesses in monitoring and ensuring approval consistency.
Increased risk of unauthorized approvals.
What Mngmt Needs to Do
Implementing a
two-factor authorization system
for high-value transactions.
Duplicate Invoice Numbers
Same customer places multiple orders with different invoice numbers
Lead to
confusion in record-keeping, financial reporting, and customer communication
What Mngmt Needs to Do
Improve
validation checks
during data entry to flag and
prevent the entry of duplicate invoice numbers
CONTINUOUS AUDIT EXERCISE
Advantages
Early Detection and Prevention of Errors and Fraud
Ongoing monitoring
of financial transactions and business processes
Enables the
early detection of irregularities, discrepancies, or fraudulent activities
Can
take immediate corrective actions
Improved Internal Controls & Risk Mngmt
Ongoing evaluation
of the
effectiveness of internal controls
Identify weaknesses in controls
Initial Steps to Establish
Establish Priority Areas
Determine
which business processes, transactions, or areas of the organization are
most critical and vulnerable to risks
such as fraud, errors, or non-compliance.
Can
tailor continuous audit efforts
to the areas
Identify Audit Rules
Identify
specific criteria or conditions that trigger alerts or actions
during the continuous audit process
Based on key risk indicators (KRIs) and performance indicators relevant
to the priority areas.
Mngmt Responsibility
invest In & Leverage Technology Solutions
Implement automated systems
that can
continuously collect, analyze, and report on relevant data and transactions
Eg:
Data analytics
- identify anomalies, patterns, or deviations from expected norms