Term
| Elements of Internal Control |
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Definition
Control Enviornment
Risk Assessment
Control Activities
Information and Communication
Monitoring |
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Term
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Definition
Commitment to Competence
Human Resources Policies and Procedures
Organizational Structure
Participation by those in charge of gov
Philisophy and op style of management
Ethical and Integrity concerns
Responsibility Assignments |
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Term
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Definition
- ID, Analysis, and Management Risk
Includes risk that may affect an entities ability to record, process, summarize, and report financial data. |
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Term
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Definition
Policies and Procedures that help ensure that management direcive are carried out
- Performance Reviews
- Information Processing
- Physical Controls
- Segregation of Duties (ARCC) |
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Term
| Information and Communication |
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Definition
Referes to ID, retention and transfer of information in a timely manner allowing personnel top perform their reponsibilities
- Info Systems consist of the methods and records used to record, process and summarize and report companies transactions
- Communication - involves establishing individual duties and responsibility relating to Internal contol and making them known to those involved |
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Term
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Definition
Establish and Maintain Internal Contol
Management monitors to consider whether they are working properly |
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Term
| Understanding the Internal Control Structure |
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Definition
1) Understand the Designe of I/C (CRIME)
2) Document Understanding of I/C
3) Assessing risk of RMM
4) Test of Controls
5) Reassess RMM to Determine DR
6) Document Conclusion |
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Term
| Undertand Design of I/C (CRIME) |
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Definition
| Have Controls been implimented? Risk Assesment Procedures |
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Term
| Undertand Design of I/C (CRIME) |
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Definition
| Have Controls been implimented? Risk Assesment Procedures - Analytical Procedures - Inquires of management and staff - inspection of documents and records - observing applications of specific controls Done for knowledge to 1) identifiy types of mistatements 2) Consider factors that affect I/C 3) Design TofC and Sub procedures - do clients contols and procedures address the RMM - Have they been implimented. Effectiveness does not matter at this point. Techniques Available - Prior Audits - Inquiry - Inspections - Observation |
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Term
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Definition
| Memorandum Flowchart Questionnaire |
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Term
| Assessing Risk of Material Mistatement |
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Definition
| Substantive Approach NO RELY -RMM high Combined Approach YES RELY - RMM low if rely then use TofC risk assesment - may NOT include an expectation that controls operate effectively (controls not adequate/cost benifit) If effective - cost/benigit - Substantive alone will not work |
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Term
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Definition
| To test the effectiveness of the design and operations of a control Testing the Cycles of ARC by RIIO |
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Term
| Reassess RMM to determine DR |
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Definition
| based on the results of TofC - is it necessary to modify the scope of SUB procedures - If as expected -> the no modification - If not expected -> sub procedures for relevant assertion would change |
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Term
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Definition
Author is required to communicate
- Significant deficiencies and material weakness to management and those charged with governance
- Basis for risk must always be documented. |
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