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Compnents of Internal Control - Coggle Diagram
Compnents of Internal Control
Control Environment
Auditor shall evaluate whether
Management has created and maintained a culture of honesty and ethical
behaviour
The strengths in the control environment elements collectively provide an
appropriate foundation for the other components of internal control.
Includes
the governance and management functions
the attitudes, awareness, and actions of those charged with governance and
management
the control environment sets the tone of an organization, influencing the
control consciousness of its people.
Elements
a)Communication and enforcement of integrity and ethical values
Elements that Influence
Effectiveness of design , Administration and Monitoring of Controls**
b)Commitment to competence
Matters such as management’s consideration of the competence levels for
particular jobs and how those levels translate into requisite skills and knowledege
c)Participation by those charged with governance
includes attributes of those charged with governance such as their
independence from management, their experience and stature, the extent of
their involvement and the information they receive and the scrutiny of activities
d)Management’s philosophy and operating style
management’s attitudes and actions towards
financial reporting
management to taking and managing business
risks,
attitude towards information processing and accounting
function and personnel
e)Organisational structure
The framework within which an entity’s activities for achieving its objectives
are planned, executed, controlled, and reviewed
f)Assignment of authority and responsibility
Matters such as how authority and responsibility for operating activities are
assigned and how reporting relationships and authorisation hierarchies are established
g)Human resource policies and practices
Policies and practices that relate to, for example, recruitment, orientation,
training, evaluation, counselling, promotion, compensation, and remedial actions