Checklist for Evaluating Internal Control Essay Example
Checklist for Evaluating Internal Control Judy Milstead ACC 544/Internal Control Systems February 18, 2013 Christine Errico
Checklist for Evaluating Internal Control In a broader sense is to define Internal Control as a process affected by an organization’s management, director, and other personnel. In order to provide reasonable assurance in regards to the achievement of objectives in the following categories: 1) Effectiveness and efficiency of Operations 2) Reliability of reporting 3) Compliance with applicable rules, laws and regulations Using this checklist as a tool to what most auditors will use if they were performing an audit or review of your company’s internal controls. The one responsible for completing this checklist is the management account. If “No” responses is indicated, this would normally indicate a potential weakness and could be offset by compensating controls in the company. Questions should be based on common sense and based on the person having custody of the asset. Taking the time to use this checklist to review the processes of internal control that can be a valuable tool. Checklist – Breakdown on three phases Phase 1: Understand and Document the Client’s Internal Control Obtaining an Understanding Control Environment Evaluation Risk Assessment Evaluation Information and Communication Assessment Phase 2: Assess the Control Risk Phase 3: Perform Tests of Controls and Reassess Control Risk Perform Tests of controls Direction of the Test of Controls Reassess the Control Risk Also with these phases, should identify assignment with the following internal
Checklist for Evaluating Internal Control In a broader sense is to define Internal Control as a process affected by an organization’s management, director, and other personnel. In order to provide reasonable assurance in regards to the achievement of objectives in the following categories: 1) Effectiveness and efficiency of Operations 2) Reliability of reporting 3) Compliance with applicable rules, laws and regulations Using this checklist as a tool to what most auditors will use if they were performing an audit or review of your company’s internal controls. The one responsible for completing this checklist is the management account. If “No” responses is indicated, this would normally indicate a potential weakness and could be offset by compensating controls in the company. Questions should be based on common sense and based on the person having custody of the asset. Taking the time to use this checklist to review the processes of internal control that can be a valuable tool. Checklist – Breakdown on three phases Phase 1: Understand and Document the Client’s Internal Control Obtaining an Understanding Control Environment Evaluation Risk Assessment Evaluation Information and Communication Assessment Phase 2: Assess the Control Risk Phase 3: Perform Tests of Controls and Reassess Control Risk Perform Tests of controls Direction of the Test of Controls Reassess the Control Risk Also with these phases, should identify assignment with the following internal