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Governance, Risk, and Compliance Handbook: Technology, Finance, Environmental, and International Guidance and Best Practices by Anthony Tarantino

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CHAPTER 22

INTERNAL CONTROLS BEST PRACTICES

Ian Rodgers

22.1 OVERVIEW

(a) Controls over Planning and Budgeting

(b) Controls over Operational Risk

(c) Controls over Financial Statement Risk

(d) Compliance-Related Controls

(e) The Audit Imperative

(f) Remediation

(g) Enterprise Risk Management, COSO ERM

22.2 COSO II

(a) Assessment of Controls

(i) Design Effectiveness and Operational Effectiveness

(ii) Scoping of the Audit Requirement

(iii) Materiality

(iv) Relevance

(v) Top-Down Approach to Controls Assessment

22.3 AUTOMATION OF CONTROLS

(a) Prevention versus Detection

(b) Field-Level Audit

22.4 TYPES OF AUTOMATED CONTROLS

(a) Access Controls

(b) Process Controls

(c) Continuous Monitoring

(i) Control Areas

(d) Transaction Controls

(e) Master Data Controls

(f) System Configuration Controls

(i) Accounting, Consolidation, and Financial Reporting Controls

(ii) Subsidiary Ledger Controls

22.5 PRIMARY FINANCIAL CONTROL CONSIDERATIONS

(a) Revenue Cycle

(b) Procurement Cycle

(c) Intangibles

(d) Property, Plant, and Equipment Cycle

(e) Inventory/Production Cycle

(f) HR/Payroll Cycle

(g) Equity Cycle

(h) Financial Close and Reporting Cycle

(i) Tax Cycle

(j) Legal Cycle

22.6 COMBINING COMPLIANCE AND OPERATIONAL REQUIREMENTS TO ACHIEVE AN ROI ON COMPLIANCE EXPENDITURE

(a) Practical Considerations

22.7 FURTHER CONSIDERATIONS

(a) Company-Level Controls and the Control Environment

(b) International Considerations

(c) COBIT

22.8 CONCLUSION

NOTES

22.1 OVERVIEW

In its pure essence, a business exists ...

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