1 Internal control systems. Frameworkforinternal control-Control environment- Control procedures. Turnbull report highlights-Information and communication processes-Processes formonitoring the continuingeffectiveness
1 Internal control systems • Framework for internal control – Control environment – Control procedures • Turnbull report highlights – Information and communication processes – Processes for monitoring the continuing effectiveness
2 Internal control environment andprocedures Control environment is the overall attitude,awareness and actions of directors andmanagement regarding internal controls andtheir importance in the entity. Controlprocedures are those policies andprocedures in addition to the controlenvironment which are established to achievethe entity' s specific objectives
2 Internal control environment and procedures • Control environment is the overall attitude , awareness and actions of directors and management regarding internal controls and their importance in the entity. • Control procedures are those policies and procedures in addition to the control environment which are established to achieve the entity` s specific objectives
2 Internal control environment andprocedures.Aims of internal checks- Segregate tasks-Createandpreservetherecords- Break down routine procedures into separatesteps-Reduce the possibility of fraud and error
2 Internal control environment and procedures • Aims of internal checks – Segregate tasks – Create and preserve the records – Break down routine procedures into separate steps – Reduce the possibility of fraud and error
2 Internal control environment andprocedures· Classification of control procedures-Administration-Accounting- Prevent- Detect- Correct
2 Internal control environment and procedures • Classification of control procedures – Administration – Accounting – Prevent – Detect – Correct
2 Internal control environment andproceduresTypesoffinancial controlprocedureAdministration- Segregation of duties- Physical-Authorisation and approval-Management- Supervision- Organisation-Arithmetical and accounting-Personnel
2 Internal control environment and procedures • Types of financial control procedure Administration – Segregation of duties – Physical – Authorisation and approval – Management – Supervision – Organisation – Arithmetical and accounting – Personnel