Chapter 13
Chapter 13
Chapter 13
Overview of
Internal Control
Tilar, Alexandra Nicole
Gervacio, Kyla Mae
Ugalde, Missy Louise
RISKS - PROTECTION
Definition:
Process designed and effected by those
charged with governance, management and
other personnel to provide reasonable
assurance about the achievement of the
entity's objective
System ....
- To achieve the objective of a business,
proper execution of business activities in
Gervacio, Kyla Mae the light of prevailing laws and socio-
economic conditions of the country
Elements of Internal
Control
2. New Personnel
- New personnel may have a different focus on or understanding of internal
control.
5. New technology
- incorporating new technologies into production process or
information systems may change the risk associated with internal
control.
D. Control Activities
Control activities are the policies and procedures that help ensure that
management directives are carried out. The major categories of control
procedures are:
A. Performance Review
B. Information Processing Controls
1) Proper authorization of transactions and activities
2) Segregation of duties
3) Adequate documents and records
4) Safeguards over access to assets
5) Independent checks on performance
C. Physical controls
D. Control Activities
A. Performance Review
• In a performance review management uses accounting and operating
data to assess performance, and it then takes corrective action. Such
reviews include;
- Comparing actual performance
- Investigating performance
-Reviewing functional or activity performance
D. Control Activities
C. Physical Controls
Control encompass the;
physical security of assets
authorization for access to computer programs and data files
periodic counting and comparison
extent to which physical controls intended to prevent theft of
assets
E. Monitoring of Controls
- process in assessing the quality of internal control over
time.