The auditor will have to review and Evaluation the internal control
Summary: Skilled, well-informed and motivated faculty and staff is an important
ingredient to an effective operation. Staff should be provided adequate training
opportunities and understand what is expected of them. Good lines of communications
are important. For internal control
Internal control is usually useful to review the various processes from time to time
asking why the various tasks are being performed and determining if the tasks add any
value to the process,. The effectiveness and efficiency of the internal control will
determine the extent of tests to be performed
This evaluation will also provide assurance on whether the systems are functioning
properly. The auditor should provide for tests in the audit programmed which could be in
the form of interviews, internal control questionnaires, checklists, audit tests.
What is Internal Control?
Internal control in its broader sense is defined as a process affected by an
organization's board of directors, management and other personnel, designed to provide
reasonable assurance regarding the achievement of objectives in the following
For example document, legal and managerial compliance is simply intended to refer to
compliance with the various laws, rules, policies, directives, and procedures that
prescribe the guidelines and parameters that we must operate within. Some of these are
self-imposed to ensure effective business and/or control practices. Following some of
example but are not limited,
* Effectiveness and efficiency of operations
* Reliability of reporting
* Compliance with applicable rules, laws and regulations
* Internal Control components include Control Environment, Risk Assessment, Control
Activities, Information and Communication and Monitoring
Most of the time the emphasis is on common control activities which may include the
*Segregation of functional responsibilities to create a system of checks and balances.
*A system of authorization and record procedures adequate to provide reasonable
accounting control over assets, liabilities, revenues, and expenditures.
*Development of policies and procedures for prescribing and documenting the business
and control processes. This should consist of a well thought out strategy and be
reviewed and adjusted periodically to reflect changes in the business and control
Procedures to evaluate internal controls:
*Description of system of internal control
*Internal Control Questionnaires
*Tests of compliance are performed to obtain sufficient evidence that the system is
operating in accordance with the understanding the auditor obtained from the review.
The nature, timing, and extent of tests of compliance are closely related to the control
procedures and methods studied by the auditor.
Matters to be considered while evaluating internal controls
*Identification of risks
*Internal control structure put in place to prevent, detect, correct undesired events
*Whether the control structure is functioning as desired
*Identification of weaknesses in the structure and their effect on auditing procedures.
Internal control consists of five interrelated components which are as follows:
Control Environment: These factors include the integrity, ethical values personnel
management’s philosophy and operating style authority and responsibility; and the
attention and direction provided the management.
Risk Assessment: A prerequisite to risk assessment is the establishment of objectives
for internally consistent. Risk assessment is the identification, analysis, and
management of relevant risks which may impede the attainment of the organizations
goals and objectives.
Control Activities: the policies and procedures which help ensure management directives
are carried out. Control activities help ensure that necessary actions are taken to
address risks, approvals, authorizations, verifications, reconciliations, reviews of
operating performance, and segregation of duties.
Information and Communication: information must be identified, captured, and
communicated in a form and time frame that enables people to effectively carry out
Monitoring: Internal control systems need to be monitored; this means that over time
management must assess the quality of the internal control system’s performance
Conclusion: Review and Evaluation the internal control structure the most of the useful
way of preventing them in the future. Reviewing the structure or operations of similar
organizations may also provide ideas on how to improve your organization
About The Author:
Mohammad Wahid Abdullah Khan (MBA, CPFA, CPIA, CFC)
Home Page: http://wahidbd.page4.me
MOHAMMAD WAHID ABDULLAH KHAN Dhaka, Bangladesh, is a PhD Candidate in
"Criminal Psychology" as well he is “freelance Author, online columnists, Human
psychoanalyst, industrial psychotherapist, Certified Financial Consultant, & Certified
Forensic Accountant, too dynamic entrepreneur, utilize creativity leadership and
teamwork to design and execute solutions that creates customer value.
Moreover Mr. Khan is CEO & Certified Consultant of” Wahid & co, Wak Business
Solutions, Wak Business Support, “Wam Associates” & leader of the” Wahid Consulting
Group”; Prior to consultancy Mr. Wahid has fulfilled more than 14 (fourteen) years
working in various fields of Business like - Accounts, Finance, Auditing (Internal &
External Audit), Project budgeting and Project costing related positions in some of the
largest group & join venture companies in Bangladesh. Which experience encouraged him
to work as a “professional consultant” from a few years,
Mr. Khan is realistic and implements his assignment within the bounds, objectives and
capabilities of the organization. His extraordinary quick understanding of strategic
options helps find direction and supports management in decision making. He has a “doer”
attitude and gets things done on the technical and functional side. As a “Consultant” Mr.
Wahid believe that his study & physiological motivation is very strong, as well my
confident level is high & my quantitative skills are well-built also he is crystal clear about
my every single goal which helped me to be a very tough contestant “Consultant” in the
business consultant arena
• Associate Member – Institute of Management Consultants Bangladesh (IMCB)
•Member- Association of Proposal Management Professionals® (APMP®)
• Member – The Next level Purchasing Association.
•Member- The Chartered Institute of Personnel and Development (CIPD)
• Member - The Professional Risk manager’s international Association (PRMIA)
• Affiliate Member- Global Association of Risk Professional (GARP)
• Member - The International Association of Risk and Compliance Professionals (IARCP)
• Lifetime Member - Dragon fire martial arts association “International” (DFMAA)
• Individual Member: License Logic LLC
• Associate Membership - The American Psychological Association (APA)
• Member - The Global Community of Information Professionals