CHPATER 3
Internal Controls
Safegurard Assets
Ensure Fin Statement Reliability
Promote Ops Efficiency
Encourage Comliance with mgmt's directives
Risk
Financial
Market Risk
Changes in stock prices, investment value, and interest rate
Credit
Inability or not willing to pay amounts owed
Liquidity
Possibility of not have cash for demand
Operational
Systems Risk
Referes to IT and computer related risks
Human Error Risk
People make mistates
Strategic
Legal and Regulatory Risk
Risk of breaking the law
Business Strategy Risk
Poor management decision makiing risk
Hazard Risk
Directors' and officers' liability
Directors' and Officers' liability
COSO'S Internal Control
Integrated Framework
Risk Assessment
Involves using taxonomy, business experience, research
and dialogue to identify the risk associated with operations.
Monitoring
Quality of internal control performance and assurance it is running effectively.
Information and Communication
For the system to work the communication must be throughout the organization
Control Activities
Actuall internal controls on the basis of the risk assesment.
Control Environment
Top management tone
Internal Controls
by Damir Dzubic
Internal Control Examples
Adequate Documentation
Background Checks
Backup of Computer Files
Backup of power supplies
Bank reconciliation
Data encryption
Document matching
Edit checks
Firewalls
Insurance and bonding
Internal audits
Lockbox systems
Physical security