Internal control framework 1. Control Environment 2 Risk Assessment 3. Control Procedures 4. Monitoring Monitoring Control Procedures Risk Assessment Control environment c6-6
C6 - 6 1. Control Environment 2. Risk Assessment 3. Control Procedures 4. Monitoring Monitoring Control Procedures Risk Assessment Control Environment Internal Control Framework
Internal Control framework 1. Control Environment 2. Risk Assessment 3. Control Procedures 4. Monitoring 5. Information and Communication Communication Monitoring Control Procedures Risk Assessment Control environment c6-7
C6 - 7 Internal Control Framework 1. Control Environment 2. Risk Assessment 3. Control Procedures 4. Monitoring 5. Information and Communication Communication Monitoring Control Procedures Risk Assessment Control Environment
Internal Control procedures Competent Personnel Rotating Duties Mandatory Vacations Separating Responsibilities for Related Operations Separating Accounting and Asset Custody Proofs and Security Measures c6-8
C6 - 8 Internal Control Procedures • Competent Personnel • Rotating Duties • Mandatory Vacations • Separating Responsibilities for Related Operations • Separating Accounting and Asset Custody • Proofs and Security Measures
Cash Accounts and Internal controls Many companies need several cash accounts to account for different cash categories and funds. Most companies have multiple bank accounts The title for each bank account should be. o Cash in Bank-(Name of Bank) Preventive controls protect cash from theft and misuse Detective controls are designed to detect theft or misuse of cash and are also preventive in nature c6-9
C6 - 9 Cash Accounts and Internal Controls Many companies need several cash accounts to account for different cash categories and funds. Most companies have multiple bank accounts. The title for each bank account should be: Cash in Bank – (Name of Bank) Preventive controls protect cash from theft and misuse. Detective controls are designed to detect theft or misuse of cash and are also preventive in nature
Internal Control of Cash Receipts Cash is normally received from two sources: 1. Over the counter from cash customers Use of a cash register is an important control 2. Received in the mail from credit customers Cash is in the form of checks All cash is sent to the Cashiers Department An employee prepares a bank deposit ticket and makes a bank deposit. The bank deposit record is sent to the Accounting Department where it is recorded c6-10
C6 - 10 1. Over the counter from cash customers. Use of a cash register is an important control. 2. Received in the mail from credit customers. Cash is in the form of checks. All cash is sent to the Cashier’s Department. An employee prepares a bank deposit ticket and makes a bank deposit. The bank deposit record is sent to the Accounting Department where it is recorded. Internal Control of Cash Receipts Cash is normally received from two sources: