Internal Control

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Internal Control

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A process effected by an entity’s board of directors,management and other personnel, designed to provide reasonable assurance regarding theachievements of objectives

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Internal Control

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An integral process; A series of actions throughout the operations on an ongoing basis

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Internal Control

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Built in rather built on; embedded with the management processes of planning, organizing, budgeting, staffing,implementing, and monitoring

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Internal Control

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Not stand alone or separate specialized systems within an agency

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Internal Control

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Interwoven into and made an integral part of each system that management uses to regulate and guide its operations

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People

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Internal control is effected by______. It’s not merely policy manuals and forms,but people functioning at every level of the organization.

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reasonable

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Internal control only provides _____________ assurance to an institution’s leaders regarding achievement of operational, financial reporting and compliance objectives.

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Control Processes

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The policies, procedures and activities that are part of a control framework, designed and operated to ensure that risks are contained within the level that an organization is willing to accept.

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Control

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any action taken by management, the board, and other parties to manage risk and increase the likelihood that established objectives and goals will be achieved.

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Control

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management plans, organizes, and directs the performance of sufficient actions to provide reasonable assurance that objectives and goals will be achieved

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Planning

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Process of determining how the organization can get where it wants to go and what the organization will do to accomplish its objectives

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Planning

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Concerned with organizational success in the near future (short term) as well as in the more distant future

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Organizing

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Process of establishing orderly uses for all resources within the management system by assigning tasks developed under the planning function to various individual or groups within the organization

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Organizing

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Creates a mechanism to put plans into action

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Influencing

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Process of guiding the activities of organization members in appropriate directions

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Influencing

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Concerned primarily with people within organization

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Influencing

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Ultimate purpose is to increase productivity; Motivating, leading, directing, or actuating

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Controlling

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Process managers go through to control. Systematic effort to compare performance to predetermined standards, plans or objectives to determine whether performance is in line with those standards or needs to be corrected

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Operational Management

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responsible for maintaining effective internal controls and for executing risk and control procedures on a day- to-day basis

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Operational Management

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Responsible for implementing corrective actions to address process and control objectives

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Operational Management

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OWN and MANAGE risks

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Direct Supervision and Observation

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Oldest technique of controlling

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Direct Supervision and Observation

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The supervisor himself observes the employees and their work. This brings him indirect contact with the workers. So, many problems are solved

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Direct Supervision and Observation

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The supervisor gets first hand information, and he has better understanding with the workers. This technique is most suitable for a small-sized business.

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Financial Statements

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Collection of reports about an organization's financial results, financial condition, and cash flows.

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Budget

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a set of interlinked plans that quantitatively describe an entity's projected future operations. It is used as a yardstick against which to measure actual operating results, for the allocation of funding, and as a plan for future operations.

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Budgetary Control

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A planning and controlling device; _______ is done for all aspects of a business such as income, expenditure,production, capital and revenue.

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breakeven point

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the sales volume at which a business earns exactly no money.

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Return on Investment

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A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments.

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Return on Investment

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To calculate __________________ the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

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Management by Objectives

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Uses organizational objectives as the primary means of managing organizations

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Management Audit

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A systematic examination of decisions and actions of the management to analyse the performance.

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Management Audit

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Involves the review of managerial aspects like organizational objective, policies, procedures,structure, control and system in order to check the efficiency or performance of the management over the activities of the Company.

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Program Evaluation and Review Technique (PERT)

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A statistical tool, used in project management which was designed to analyze and represent the tasks involved in completing a given project. Most commonly used methods for project management.

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Critical Path Method (CPM)

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A method of project planning consisting of a number of well defined and clearly recognizable activities.• An algorithm for scheduling a set or project activities

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Management Information System (MIS)

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A computerized database of financial information organized and programmed in such a way that it produces regular reports on operations for every level of management in a company. It is usually also possible to obtain special reports from the system easily.

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Management Information System (MIS)

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The main purpose of the_________ is to give managers feedback about their own performance; top management can monitor the company as a whole. Information displayed by the MIS typically shows "actual" data over against "planned" results and results from a year before; thus it measures progress against goals.

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Key and significant control

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Minimum set of controls that can provide reasonable assurance that the risk is mitigated, provided that the controls are designed properly, operating as intended and are demonstrable.

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Secondary control

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Any other controls not defined as key or significant. These are supplemental controls frequently used to improve the timeliness of detection of issues or backlog controls used as emergency “catchalls”.

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Preventive

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designed to limit the possibility of an undesirable outcome being realized• attempt to stop a risk from occurring

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Corrective

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designed to limit the scope for loss and reduce any undesirable outcomes which have been realized• may also provide a route of recourse to achieve some recovery against loss or damage

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Directive

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designed to ensure that a particular outcome is achieved• attempt to avoid risks by providing specific ways to do things

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Detective

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designed to identify occasions of undesirable outcomes having been realized• their effect is, by definition, “after the event” so they are only appropriate when it is possible to accept that the loss or damage has incurred• attempt to determine if a risk has occurred

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Data Capture Controls

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ensures that all transactions are recorded in the application system, transactions are recorded only once, and rejected transactions are identified, controlled,corrected, and reentered into the system.

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Data Validation Controls

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ensures that all transactions are properly valued

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Processing Controls

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ensures the proper processing of transactions.

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Output Controls

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ensures that computer output is not distributed or displayed to unauthorized users.

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Error Controls

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ensures that errors are corrected and resubmitted to the application system at the correct point in processing.

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Economical Operations

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able to perform functions/tasks using the least amount of resources within a specified time frame

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Efficient Operations

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“doing things right” given the available resources and within a specified time frame

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Effective Operations

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“doing the right things”, able to deliver major final outputs and outcomes and able to contribute to the attainment of goals and objectives