8.Control risk.pdfVIP

Control Risk Audit risk Internal control - Definition ? Internal control describes the process designed, implemented and maintained by those charged with governance, management and other personnel to provide them with reasonable assurance that an entity will achieve its objectives with regard to ?The reliability of financial reporting (internal and external) ?The effectiveness and efficiency of operations and ?Compliance with applicable laws and regulations Purchase Cycle Order stage Goods received invoiced recorded Payment made Goods received note (GRN) Remittance adviceInvoice Purchase requisition Order form Background - control Objective Staff in the ordering department use this list to place orders with authorised suppliers. Ensure the purchase can enjoy competitive price and satisfied quality Control activities - purchase Background - control Objective All deliveries are checked against the orders placed file before being accepted. A hand- written pre-numbered goods received note (GRN) is raised in the goods inwards department Ensure the goods received are the items on orders and with correct quantity and good quality Control activities - purchase Background - control Objective The orders placed file is updated with the GRN number to show that the parts have been received Ensure all goods ordered have been received in time. In addition if no check is made against order then the company may have significant purchase orders which are outstanding, leading to lost sales. Control activities - purchase Background - control Objective Paper invoices are sent by all suppliers following dispatch of goods. Invoices are sent to the accounts department, where they are stamped with a unique ascending number. Ensure all purchase transactions have been accounted for Control activities - purchase Background - control Objective Invoice details are matched to the GRN, which is then attached to the invoice. Ensure the invoices received