Évaluation des Contrôles Internes - Partie 4.3

PART 4.3: INTERNAL CONTROL ASSESSMENT

• Internal control assessment is a means to issue an opinion, not an objective.
• Statutory financial auditors identify significant risks and major internal control weaknesses that could materially impact accounting and financial information.
• Procedure controls are tests performed by auditors to obtain sufficient appropriate audit evidence about the effectiveness of controls.

PART 4.3.1: INTERNAL CONTROL REVIEW METHODS

• This section details methods for reviewing internal controls.

CONTROL OF INTERNAL CONTROL

• Auditors certify financial statements by identifying significant risks and major internal control weaknesses impacting accounting and financial information.

INTERNAL CONTROL SYSTEM ASSESSMENT

• Phase I: System understanding, preliminary assessment, internal control assessment, check for possibility of relying on controls.
  • If "YES": Function check, reliable function, final assessment of internal control
  • If "NO": Operational risk analysis, design risk analysis, proceed to Phase II (opinion & recommendations)
• Phase II: Opinion & recommendations.

PROCEDURE TESTING GOAL

• Assess the effectiveness of controls designed and implemented to prevent, detect, or correct material misstatements in financial statements.
• Steps include confirming understanding of internal control, evaluating internal control design, and ensuring internal controls operate effectively.

PHASES & TESTING TYPES

• Organization understanding: Gaining knowledge of the organization's procedures.
• Getting to know procedure: Learning about the procedures.
• Flow tests: Following a limited number of transactions through the information system.
• Preliminary assessment of procedures: Assessing the procedures.
• Checking the functioning of procedures: Examining how procedures work.
• Compliance tests: Verifying internal control procedures.
• Final assessment of procedures: Final evaluation of procedures.
• Ensure that strength controls are applied: Confirming control effectiveness.
• Weakness controls: Identifying weaknesses in controls.
• Continuity & revealing tests: Testing procedures for continuity and revealing potential risks.

PROCEDURE TESTING TYPES

• Flow test or walk-through test: Following a limited number of transactions through the information system.
• Compliance or existence test: Verifying internal control procedures on a limited number of transactions.
• Continuity or permanence test: Checking if theoretical strength controls are always applied (sample basis).
• Revealing test: Checking theoretical weakness controls (sample basis).

PROCEDURE TESTING TOOLS & TECHNIQUES

• Organization understanding: Flow charts, segregation of duties, trails, physical observation, questionnaires, interviews, procedures, manuals, job descriptions, previous audit reports.
• Information checking: Information checking, Request for third-party confirmation, Re-execution of controls, comparisons between theory and practice, control point methods.
• Strengths & weaknesses checking: Collation of documents, samplings (statistical).

PART 4.3.2: FLOW CHART

• This part focuses on flow charts in internal control reviews.

DEFINITION & PRINCIPLE

• Document and information circulation diagrams: Diagrams used to represent and understand the process of information flow.
  • Identifying the process.
  • Identifying the activities performed.
  • Identifying the players (individuals involved).
  • Identifying the documents used.
  • Identifying the flow of activities, inputs, and outputs.

COMMON SYMBOLS

• Symbols used in flow charts to represent process, decisions, documents, and connections. (e.g., rectangle for process, diamond for decision, etc.)

EXAMPLE: EXPENSES REIMBURSEMENT

• A flow chart illustrating steps in expense reimbursement process (e.g., applicant fill-in form, validation tasks, documentation confirmation, and final payment).

AND NOW PLAY ON !

• Instructions for students for a group work task.

NPO: SUPPLIER INVOICE PAYMENT

• Explanation of the steps involved in invoice payment for non-profit organizations.
  • Process to be represented: paying invoices to suppliers.
  • Identifying activities, players, documents, and flows.

NPO: SUPPLIER INVOICE PAYMENT (DETAILS)

• Breakdown of activities, inputs, and outputs for each player in the invoice payment process (e.g., mail service, accounting, applicant, CFO).