When you are performing an audit, to judge the reliability of a client’s internal control procedures, you first have to be aware of the five components that make up internal controls. Control activities are performed at all levels of the entity, at various stages within business processes, and over the technology environment. COSO: A Framework for enhancing Internal Control over Financial Reporting Today we will continue with the COSO framework and we will be looking at Control Activities which is the third of the five (5) integrated components of COSO. When designing internal controls, the control environment and control activities should be considered. Another way of looking at internal control is t Control activities are policies and procedures established by management to ensure the risks identified during the risk assessment process are mitigated or reduced to an acceptable level. 4 | COSO Internal Control – Integrated Framework: An Implementation Guide for the Healthcare Provider Industry | Crowe Bill Watts, a risk consulting partner with Crowe, noted, “COSO provides a road map to building a fundamental foundation of internal control to ensure that the risks an organization takes are monitored and mitigated through

Authorization should be timely: Workflow is an important aspect of good internal controls. This is the meat of your internal control system - it’s all about putting your protection plan into action.

Control activities refer to the specific detailed policies and procedures, such as review of company performance through variance analysis, physical and logical controls, and segregation of duties. All employees fit into the organizational picture of internal control, whether or not their job responsibilities are directly related to these example activities. Simply stated, they are checks and balances embedded in a company’s operations. For each client, you need to understand each component to plan your audit. Since policies and procedures are usually informal for smaller entities, management personnel should communicate internal controls through frequent contact with accounting personnel. Controls may be preventive or detective and can be manual and/or automated. Internal control is an interlocking set of activities that are layered onto the normal operating procedures of an organization, with the intent of safeguarding assets, minimizing errors, and ensuring that operations are conducted in an approved manner. Internal controls are the policies and procedures that a business puts into place in order to protect its assets, ensure its accounting data is correct, maximize the efficiency of its operation and promote an atmosphere of compliance among its employees. It is a means by which an organization's resources are directed, monitored, … Properly designed internal controls have the ability to mitigate risk and help an entity carry out managements directives. It represents our moral responsibility to understand and comply with University policies and procedures, as well as to hold ourselves and one other accountable. Segregation of duties is an important internal control that helps prevent a lot of problems, one of which is fraud. Internal control is relevant to everyone in the workplace.

Segregation of Duties 6) The system of internal control should maximize effectiveness and efficiency by including activities that are tailored to the nature, size and complexity of the entity.

Internal controls are typically comprised of control activities such as authorization, documentation, reconciliation, security, and the separation of duties. Information critical to identifying risks and meeting business objectives is communicated through established channels across the company. Internal Control objectives are desired goals or conditions for a specific event cycle which, if achieved, minimize the potential that waste, loss, unauthorized use or misappropriation will occur. Your understanding of these … In a large organisation, it may also be necessary to track movement of assets between departments (with an asset transfer form), and assign responsibility for assets to department heads.