PD 9184 and its IRR-A.ppt

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    1

    TRAINING ON INTERNAL CONTROL

    EVALUATION

    Learning Objectives:

    1. To discuss Internal Control Structure (ICS);

    2. To link ICS with Risk Based Audit (RBA), fro the !T" tothe AAR#SC $hase;

    %. To de&elo$'i$ro&e the skills of $artici$ants on thee&aluation of internal control; and

    . To $ro&ide uidance on the utili*ation of the knowledeo+tained in this seinar in the eecution of audit work inthe #RAR $hase and re$ortin of audit results in theC- $hase.

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    2

    ISA 315(Internatina! Stan"ar"s n A#"iting$

    %Understanding the Entity and Its Environment and

    Assessing the Risks of Material Misstatementre/uiresthe auditor to0

    1. "+tain an understandin of internal control structure and on

    audit risks.

    2. !se this understandin to identif t$es of $otentialisstateents.

    %. Consider factors affectin the risks of $otential

    isstateents.

    . esin the nature, tiin and etent of further audit

    $rocedures.

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    %

    IT3RA4 C"TR"4 S5ST3# defined0

    All the $olicies and $rocedures ado$ted + anaeent to ensure 0

    orderl and efficient conduct of its +usiness;

    adherence to anaeent $olicies;

    safeuardin of assets;

    $re&ention and detection of fraud and error; accurac and co$leteness of accountin records; and

    tiel $re$aration of relia+le financial inforation.

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    nctins' Interna! Cntr!6 reventive Cntr!s7

    are desined to $re&ent ad&erse actions or risks frooccurrin.

    6 )etective Cntr!s *

    are desined to detect an error or ad&erse e&ent after it

    occurred +ut within a reasona+le tie to $erit correction.

    6 Crrective Cntr!s *

    are desined to reed $ro+les disco&ered with detecti&e

    controls.

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    8

    Objectives ' Interna! Cntr!

    1. 9inancial re$ortin control o+:ecti&e0

    relates to the relia+ilit of the financial re$ortin $ro&ided+ accountin inforation sste and recordin function.

    2. "$erations controls o+:ecti&e0

    is intended to enhance the effecti&eness and efficienc

    of o$erations.

    %. Co$liance controls o+:ecti&e0

    relates to co$liance with laws and reulations.

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    Interna!Cntr! assertins

    There are two assertions of anaeent0

    6 internal control and

    6 financial stateents.

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    1

    &stablish 'isk (anagement

    )rocess

    1

    a. efine

    Risk anaeent

    oals and o+:ecti&es Coon lanuae

    +. 3sta+lish risk o&ersiht

    structures

    !T" Assess Risk #anaeent =rocess

    Estab!is0 ris5

    ,anage,ent .rcessGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    6 Doals and o+:ecti&es

    6 Coon 4an)ua)e

    6 "&ersi)ht structure

    In'r,atin 'r

    "ecisin ,a5ing

    )esign i,.!e,ent ris5,anage,ent .rcessesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Risk ana)eent strate)iesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Risk controls

    +nitr ris5 ,anage,ent

    .rcesses .er'r,ance

    Cntin##s!/ i,.rve

    ris5 ,anage,ent

    ca.abi!ities

    Assess agenc/ ris5sGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Identif1 Source #easure

    )eve!. ris5

    ,anage,ent strategiesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    A&oid 3,$loit Transfer

    Acce$t and reduce

    !T" Assess Risk #anaeent =rocess

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    >2

    Assess Agency 'isk

    %dentify

    *ource

    (easure

    a. Chanes in the en&ironent,ke assu$tions, and

    o$eration $rocess, and the

    i$act of these chanes

    +. =rocess or acti&ities to

    assess aenc risks and

    inforation and inforation

    $rocessin (II=)

    @

    Estab!is0 ris5

    ,anage,ent .rcessGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    6 Doals and o+:ecti&es

    6 Coon 4an)ua)e

    6 "&ersi)ht structure

    In'r,atin 'r

    "ecisin ,a5ing

    )esign i,.!e,ent ris5,anage,ent .rcessesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Risk ana)eent strate)iesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Risk controls

    +nitr ris5 ,anage,ent

    .rcesses .er'r,ance

    Cntin##s!/ i,.rve

    ris5 ,anage,ent

    ca.abi!ities

    Assess agenc/ ris5sGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Identif1 Source #easure

    )eve!. ris5

    ,anage,ent strategiesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    A&oid 3,$loit Transfer

    Acce$t and reduce

    * 'evelop Risk Management &trategies

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    >%

    *+'evelop Risk Management &trategies

    6 Avoid

    6 &+ploit6 Transfer

    6 Accept and

    'educe

    Estab!is0 ris5

    ,anage,ent .rcessGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    6 Doals and o+:ecti&es6 Coon 4an)ua)e

    6 "&ersi)ht structure

    In'r,atin 'r

    "ecisin ,a5ing

    )esign i,.!e,ent ris5

    ,anage,ent .rcessesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Risk ana)eent strate)iesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGRisk controls

    +nitr ris5 ,anage,ent

    .rcesses .er'r,ance

    Cntin##s!/ i,.rve

    ris5 ,anage,ent

    ca.abi!ities

    Assess agenc/ ris5sGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Identif1 Source #easure

    )eve!. ris5

    ,anage,ent strategiesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    A&oid 3,$loit TransferAcce$t and reduce

    , 'esign-Implement Risk Control %roess

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    >

    ,+ 'esign-Implement Risk Control %roess

    a. 3nsure i&ision ead

    and $rocess'acti&it

    owners0 a&e the re/uisite

    skill and e$ertise Assue

    res$onsi+ilit andaccounta+ilit foranain sinificantrisk.

    +. Assess the tieliness,efficienc andeffecti&eness of thedesin of new or

    i$ro&ed risk control$rocesses.

    Estab!is0 ris5

    ,anage,ent .rcessGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    6 Doals and o+:ecti&es

    6 Coon 4an)ua)e

    6 "&ersi)ht structure

    In'r,atin 'r

    "ecisin ,a5ing

    )esign i,.!e,ent ris5

    ,anage,ent .rcessesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Risk ana)eent strate)iesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGRisk controls

    +nitr ris5 ,anage,ent

    .rcesses .er'r,ance

    Cntin##s!/ i,.rve

    ris5 ,anage,ent

    ca.abi!ities

    Assess agenc/ ris5sGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Identif1 Source #easure

    )eve!. ris5

    ,anage,ent strategiesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    A&oid 3,$loit Transfer

    Acce$t and reduce

    UTO ? Assess Ris +anage,ent rcess

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    >8

    (onitor 'isk (anagement )erformance

    This includes0

    a. !tili*ation of all

    a&aila+le Haudit

    o$$ortunities

    +. Bencharkin aainst

    leadin 4D! $ractices,standards set +

    o&ernent and, to

    the etent a$$lica+le,

    international standards

    5Estab!is0 ris

    ,anage,ent .rcessGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    6 Doals and o+:ecti&es6 Coon 4anuae

    6 "&ersiht structure

    In'r,atin 'r

    "ecisin ,aing

    )esign i,.!e,ent ris,anage,ent .rcessesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Risk anaeent strateiesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Risk controls

    +nitr ris ,anage,ent

    .rcesses .er'r,ance

    Cntin##s!/ i,.rve

    ris ,anage,ent

    ca.abi!ities

    Assess agenc/ rissGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Identif Source #easure

    )eve!. ris

    ,anage,ent strategiesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    A&oid 3$loit Transfer

    Acce$t and reduce

    UTO ? Assess Ris +anage,ent rcess

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    >

    ontinuously %mprove'isk (anagement

    apabilities

    Estab!is0 ris

    ,anage,ent .rcessGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    6 Doals and o+:ecti&es6 Coon 4anuae

    6 "&ersiht structure

    In'r,atin 'r

    "ecisin ,a5ing

    )esign i,.!e,ent ris

    ,anage,ent .rcessesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Risk anaeent strateiesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Risk controls

    +nitr ris ,anage,ent

    .rcesses .er'r,ance

    Cntin##s!/ i,.rve

    ris ,anage,ent

    ca.abi!ities

    Assess agenc/ rissGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    Identif Source #easure

    )eve!. ris

    ,anage,ent strategiesGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

    A&oid 3$loit TransferAcce$t and reduce

    3nsure that risk anaeent, control and onitorin

    $rocesses'acti&ities are co