SlideShare a Scribd company logo
1 of 31
NewAuditing
Responsibilities u/s
143 ofCompanies
Act 2013
Bharath Rao | 23rd June 2016
Outline Mistakes IFCs
Guidance
Note
Examples
IFCs - bharathraob.com 2
Mistakes
IFCs - bharathraob.com
Mistakes IFCs Guidance Examples
3
Mistakes…
Carrian
Group
1993
Accounting fraud. An auditor
was murdered, an adviser
committed suicide.The largest
collapse in Hong Kong history
WorldCom 2001
Fraudulent Accounting Methods
to increase.The Legend of all
scams
Peregrine
Systems
2002 Overstated sales
Satyam 2009
Falsification of Accounts.
Legend of Indian Corporate
Scams
IFCs - bharathraob.com 4
Effects
Goodwill?
Public
Trust?
Belief?Jobs
Penalties Money
IFCs - bharathraob.com 5
Causes
Greed
“Too Much”
Determination
Inefficient
Internal
Controls
Loopholes
Lack of
Guidance
IFCs - bharathraob.com 6
Regulations and
Internal Financial
Controls
IFCs - bharathraob.com
Mistakes IFCs Guidance Examples
7
Section 134 –
• Director’s
Responsibility
Statement –
• Listed
Companies
shall have
IFCs
Section 143 –
• Auditor’s
Report shall
State –
• Adequate IFCs
System and is
operating
effectively
Section 149 –
• Independent
Directors –
• Integrity of
Financial
Information
and IFCs are
robust and
Dependable
Section 177 –
• Audit
Committee –
• Evaluate IFCs
and Risk
Management
System
Clause 49(V)(c)
–
• CEO/CFO
Certification –
• Accept
Responsibility
for
establishing
and
maintaining
ICFR and have
valuated their
effectiveness.
Regulations
IFCs - bharathraob.com 8
Internal
Controls
The Process designed,
implemented and maintained by
TCWG and other personnel to
provide reasonable assurance
about the achievement of the
entity’s objectives with regards to
reliability of financial reporting,
effectiveness and efficiency of
operations, safeguarding of assets
and compliance of applicable laws
and regulations
IFCs - bharathraob.com 9
Components
of Internal
Controls
(COSO
Framework)
Control
Environment
Risk
Assessment
Control
Activities
Information and
Communication
Monitoring
IFCs - bharathraob.com 10
Internal
Control
Equation
General
Controls
IT
Controls
Internal
Controls
IFCs - bharathraob.com 11
ITControls
IT Controls
Application
Controls – (ITAC)
IT General
Controls - (ITGC)
IFCs - bharathraob.com 12
Internal
Financial
Controls
explained as
perCA 2013
 Explanation to section 134(5)(e) — For the
purposes of this clause, the term “internal
financial controls” means the policies and
procedures adopted by the company
 for ensuring the orderly and efficient conduct
of its business,
 including adherence to company’s policies, the
safeguarding of its assets,
 the prevention and detection of frauds and
errors, the accuracy and completeness of the
accounting records,
 and the timely preparation of reliable financial
information
IFCs - bharathraob.com 13
One More
StepUnder
Business
Process
Financials
IFCs - bharathraob.com 14
What
Internal
Financial
Controls?
Business Risk
IT and Operational Risks
Financial Risk
Internal Financial
Controls
IFCs - bharathraob.com 15
Audit Risk
and
Sampling
Strategy
Audit Risk
Detection
Risk
Controllable
Risk
Inherent
Risk
Higher Sampling Lowers
Detection Risk
Define Level of Confidence (90%)  Forms basis
of Sampling (10% of Population)
IFCs - bharathraob.com 16
Guidance Note of
ICAI
IFCs - bharathraob.com
Mistakes IFCs Guidance Examples
17
Financial
Areas
Cash/Bank
Balances
Prepaid
Expenses
Trade
Receivable
Inventory
Goodwill and
Intangible
Assets
Trade
Payables
Provision for
Expenses
Loans/Borrowi
ngs
Employee
Benefits
Taxes
Share Capital,
Reserves
Revenue from
Operations
Cost of
Production,
Sales
Depreciation Finance Costs
IFCs - bharathraob.com 18
Suggested
Areas
Identification
and Inspection
of
Documentation
of Policies,
Processes
Identifying and
Understanding
the business
applications
and their roles
Perform Design
Effectiveness to check if
Policies and Documented
Procedures are sufficient
and adequate to the size
of the business
Perform
Testing for
Operational
Effectiveness,
Audit Evidence
and
Documentation
The Process to be followed
IFCs - bharathraob.com 19
The Process
to be
followed in
Detail
IFCs - bharathraob.com 20
IG4–
Understanding
the IT
Environment
Significant Accounts and
Disclosures
It’s Relevant Applications
Relevant IT Infrastructure
(OS, Database, Hardware)
Relevant IT risks
Relevant IT Controls
IFCs - bharathraob.com 21
IG 6 –
Segregation
of Duties
IFCs - bharathraob.com 22
IG 6 –
Segregation
of Duties
IFCs - bharathraob.com 23
IG 10 –
Techniques
forControl
Testing
Inquiry Observation
Examination of
Documentation
Re-
Performance
Walkthroughs
(IG 12)
IFCs - bharathraob.com 24
IG 11 – IFC –
Testing of
Design
 Objectives:
 Conclude on effectiveness of the design to assess
risk
 Plan the nature, timing and extent of the tests for
operating effectiveness
 Understand the Nature and significance of the
risks of material misstatement addressed by the
control
 Characteristics or details of the control
 Factors to determine whether the control is
appropriately designed to address the identified
risk.
 Competence and authority of the person(s)
performing the control
 Frequency and consistency with which the control
is performed
IFCs - bharathraob.com 25
IG 13 – IFC –
Test of
Operating
Effectiveness
Assess Findings and Conclude
Perform tests of Operating Effectiveness
Plan the NTE of Operating Effectiveness based
on results of Design Effectiveness
Assess the risk associated with the control
IFCs - bharathraob.com 26
IG 15 – Roll
Forward
Testing
 Objective:
 To identify any changes to the business occurred
that could give rise to new, or affect existing risks
of material misstatement,
 That would necessitate implementing new
controls or modifying the design of existing
controls
 Existing controls continue to operate effectively in
the roll forward period
 Identification of “Roll Forward Period”
 Auditor rolls-forward the conclusions of the
effectiveness of those relevant controls which
were tested and concluded to be effective as at
an interim date
Initial/MajorTesting Period Roll Forward Period
Interim
Date
IFCs - bharathraob.com 27
Some more
Newer
Concepts
IG 16 – Rotation Plan for testing IFCs
IG 17 – RemediationTesting
IG 18 – Using Work of Internal
Auditors (SA 610) and Expert (SA
620)
IFCs - bharathraob.com 28
Reporting
 Obtain Management’s Assertion regarding
Internal Financial Controls
 Details of Areas, Processes and the Internal
Controls deployed and their status
 Define Auditor’s Responsibility (SA 210) and
limitations
 Report (As an Annexure or Separate Report)
– SA 700, SA 705
 Opinion regarding the design and operating
effectiveness of the IFCs
IFCs - bharathraob.com 29
Examples
ControlActivities andTestingTemplates
IFCs - bharathraob.com
Mistakes IFCs Guidance Examples
30
ThankYou 
Bharath Rao | +91 88922 29220 | mailme@bharathraob.com |
Bharathraob.com |
/bharathraob
IFCs - bharathraob.com 31

More Related Content

What's hot

Internal Financial Controls
Internal Financial ControlsInternal Financial Controls
Internal Financial ControlsPranav Joshi
 
Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...
Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...
Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...Taufir Alam
 
Internal control and Control Self Assessment
Internal control and Control Self AssessmentInternal control and Control Self Assessment
Internal control and Control Self AssessmentManoj Agarwal
 
Common internal audit findings & how to avoid them
Common internal audit findings & how to avoid themCommon internal audit findings & how to avoid them
Common internal audit findings & how to avoid themSurajit Datta
 
Coso internal control integrated framework
Coso internal control   integrated frameworkCoso internal control   integrated framework
Coso internal control integrated frameworkIrfan Ahmed - ACA, CICA
 
Introduction to internal auditing
Introduction to internal auditingIntroduction to internal auditing
Introduction to internal auditingDavid Griffiths
 
Internal Control
Internal ControlInternal Control
Internal ControlSalih Islam
 
An introduction to internal auditing
An introduction to internal auditingAn introduction to internal auditing
An introduction to internal auditinggrifff
 
Coso Internal Control Integrated Framework
Coso Internal Control Integrated FrameworkCoso Internal Control Integrated Framework
Coso Internal Control Integrated Frameworkhyesue
 
Internal audits role in compliance
Internal audits role in complianceInternal audits role in compliance
Internal audits role in complianceSalih Islam
 

What's hot (20)

Internal Financial Controls
Internal Financial ControlsInternal Financial Controls
Internal Financial Controls
 
Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...
Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...
Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...
 
Coso framework
Coso frameworkCoso framework
Coso framework
 
Internal Auditor Roles
Internal Auditor RolesInternal Auditor Roles
Internal Auditor Roles
 
Internal control and Control Self Assessment
Internal control and Control Self AssessmentInternal control and Control Self Assessment
Internal control and Control Self Assessment
 
Common internal audit findings & how to avoid them
Common internal audit findings & how to avoid themCommon internal audit findings & how to avoid them
Common internal audit findings & how to avoid them
 
Internal audit ppt
Internal audit  pptInternal audit  ppt
Internal audit ppt
 
Lecture slide ,chapter 2, Governance and the Auditor
Lecture slide ,chapter 2, Governance and the AuditorLecture slide ,chapter 2, Governance and the Auditor
Lecture slide ,chapter 2, Governance and the Auditor
 
Internal Audit Reporting
Internal Audit ReportingInternal Audit Reporting
Internal Audit Reporting
 
Coso internal control integrated framework
Coso internal control   integrated frameworkCoso internal control   integrated framework
Coso internal control integrated framework
 
Risk based internal auditing
 Risk based internal auditing Risk based internal auditing
Risk based internal auditing
 
Fixed assets management and control
Fixed assets management and controlFixed assets management and control
Fixed assets management and control
 
Introduction to internal auditing
Introduction to internal auditingIntroduction to internal auditing
Introduction to internal auditing
 
Ifc deloitte
Ifc deloitteIfc deloitte
Ifc deloitte
 
Internal Control
Internal ControlInternal Control
Internal Control
 
An introduction to internal auditing
An introduction to internal auditingAn introduction to internal auditing
An introduction to internal auditing
 
Coso Internal Control Integrated Framework
Coso Internal Control Integrated FrameworkCoso Internal Control Integrated Framework
Coso Internal Control Integrated Framework
 
Internal Audit
Internal AuditInternal Audit
Internal Audit
 
Internal audits role in compliance
Internal audits role in complianceInternal audits role in compliance
Internal audits role in compliance
 
Internal audit ppt
Internal audit pptInternal audit ppt
Internal audit ppt
 

Viewers also liked

Internal Reporting with Tableau
Internal Reporting with TableauInternal Reporting with Tableau
Internal Reporting with TableauManas Bhatnagar
 
ICPAS Breakfast Talk Series - Maximising IT Audit 13 Mar 2013
ICPAS Breakfast Talk Series - Maximising IT Audit 13 Mar 2013ICPAS Breakfast Talk Series - Maximising IT Audit 13 Mar 2013
ICPAS Breakfast Talk Series - Maximising IT Audit 13 Mar 2013Barun Kumar
 
Life of the software - SDLC
Life of the software - SDLCLife of the software - SDLC
Life of the software - SDLCBharath Rao
 
Compilación coso, sox, mejores practicas internacionales en control interno
Compilación coso, sox, mejores practicas internacionales en control internoCompilación coso, sox, mejores practicas internacionales en control interno
Compilación coso, sox, mejores practicas internacionales en control internoNorman Lopez
 
Framework For Evaluating Internal Controls Over Financial Reporting In Sovere...
Framework For Evaluating Internal Controls Over Financial Reporting In Sovere...Framework For Evaluating Internal Controls Over Financial Reporting In Sovere...
Framework For Evaluating Internal Controls Over Financial Reporting In Sovere...icgfmconference
 
IS Audit and Internal Controls
IS Audit and Internal ControlsIS Audit and Internal Controls
IS Audit and Internal ControlsBharath Rao
 
Sarbanes Oxley Act
Sarbanes Oxley ActSarbanes Oxley Act
Sarbanes Oxley Actles561
 
Design and implementation of students timetable management system
Design and implementation of students timetable management systemDesign and implementation of students timetable management system
Design and implementation of students timetable management systemNnachi Isaac Onuwa
 
MARKETING INFORMATION SYSTEM
MARKETING INFORMATION SYSTEMMARKETING INFORMATION SYSTEM
MARKETING INFORMATION SYSTEMJAY BHANSALI
 

Viewers also liked (13)

Internal Reporting with Tableau
Internal Reporting with TableauInternal Reporting with Tableau
Internal Reporting with Tableau
 
ICPAS Breakfast Talk Series - Maximising IT Audit 13 Mar 2013
ICPAS Breakfast Talk Series - Maximising IT Audit 13 Mar 2013ICPAS Breakfast Talk Series - Maximising IT Audit 13 Mar 2013
ICPAS Breakfast Talk Series - Maximising IT Audit 13 Mar 2013
 
Satyanarayana fi notes
Satyanarayana fi notesSatyanarayana fi notes
Satyanarayana fi notes
 
Life of the software - SDLC
Life of the software - SDLCLife of the software - SDLC
Life of the software - SDLC
 
Prez1
Prez1Prez1
Prez1
 
Coso – sox – mejores practicas
Coso – sox – mejores practicasCoso – sox – mejores practicas
Coso – sox – mejores practicas
 
Compilación coso, sox, mejores practicas internacionales en control interno
Compilación coso, sox, mejores practicas internacionales en control internoCompilación coso, sox, mejores practicas internacionales en control interno
Compilación coso, sox, mejores practicas internacionales en control interno
 
Framework For Evaluating Internal Controls Over Financial Reporting In Sovere...
Framework For Evaluating Internal Controls Over Financial Reporting In Sovere...Framework For Evaluating Internal Controls Over Financial Reporting In Sovere...
Framework For Evaluating Internal Controls Over Financial Reporting In Sovere...
 
IS Audit and Internal Controls
IS Audit and Internal ControlsIS Audit and Internal Controls
IS Audit and Internal Controls
 
Sarbanes oxley act
Sarbanes oxley actSarbanes oxley act
Sarbanes oxley act
 
Sarbanes Oxley Act
Sarbanes Oxley ActSarbanes Oxley Act
Sarbanes Oxley Act
 
Design and implementation of students timetable management system
Design and implementation of students timetable management systemDesign and implementation of students timetable management system
Design and implementation of students timetable management system
 
MARKETING INFORMATION SYSTEM
MARKETING INFORMATION SYSTEMMARKETING INFORMATION SYSTEM
MARKETING INFORMATION SYSTEM
 

Similar to Internal Controls over Financial Reporting in the Indian Context

Ch7 Quiz Questions And Solutions
Ch7 Quiz Questions And SolutionsCh7 Quiz Questions And Solutions
Ch7 Quiz Questions And SolutionsSamantha Caldwell
 
Spire Brief - Risk Consulting
Spire Brief - Risk ConsultingSpire Brief - Risk Consulting
Spire Brief - Risk ConsultingPrashant Jain
 
Assignment 3 Capstone Research ProjectDue Week 10 and worth.docx
Assignment 3 Capstone Research ProjectDue Week 10 and worth.docxAssignment 3 Capstone Research ProjectDue Week 10 and worth.docx
Assignment 3 Capstone Research ProjectDue Week 10 and worth.docxannrodgerson
 
Principle and Practice of Management MGT chap016
Principle and Practice of Management MGT chap016Principle and Practice of Management MGT chap016
Principle and Practice of Management MGT chap016IIUM
 
Question 1 1. The American Institute of Certified Public Account.docx
Question 1 1. The American Institute of Certified Public Account.docxQuestion 1 1. The American Institute of Certified Public Account.docx
Question 1 1. The American Institute of Certified Public Account.docxmakdul
 
IFC Knowldge Sharing 23.02.20 (1).pptx
IFC Knowldge Sharing 23.02.20 (1).pptxIFC Knowldge Sharing 23.02.20 (1).pptx
IFC Knowldge Sharing 23.02.20 (1).pptxSejalJain178980
 
ACC 562 Enhance teaching / snaptutorial.com
ACC 562 Enhance teaching / snaptutorial.com ACC 562 Enhance teaching / snaptutorial.com
ACC 562 Enhance teaching / snaptutorial.com donaldzs48
 
Acc 562 Exceptional Education-snaptutorial.com
Acc 562 Exceptional Education-snaptutorial.comAcc 562 Exceptional Education-snaptutorial.com
Acc 562 Exceptional Education-snaptutorial.comrobertleses2
 
intermediate-accounting.docx
intermediate-accounting.docxintermediate-accounting.docx
intermediate-accounting.docxlalalalisa9
 
ACC 562 Final Exam
ACC 562 Final ExamACC 562 Final Exam
ACC 562 Final Examsonjon03
 
ACC 492 Education Specialist |tutorialrank.com
ACC 492 Education Specialist |tutorialrank.comACC 492 Education Specialist |tutorialrank.com
ACC 492 Education Specialist |tutorialrank.comladworkspaces
 
ACC 492 Education Specialist |tutorialrank.com
ACC 492 Education Specialist |tutorialrank.comACC 492 Education Specialist |tutorialrank.com
ACC 492 Education Specialist |tutorialrank.comladworkspaces
 
Assume you are the partner in an accounting firm hired to perform th.docx
Assume you are the partner in an accounting firm hired to perform th.docxAssume you are the partner in an accounting firm hired to perform th.docx
Assume you are the partner in an accounting firm hired to perform th.docxAMMY30
 
Financial Integrity Sharing Session_BUMN_14Okt_221013_154824.pdf
Financial Integrity Sharing Session_BUMN_14Okt_221013_154824.pdfFinancial Integrity Sharing Session_BUMN_14Okt_221013_154824.pdf
Financial Integrity Sharing Session_BUMN_14Okt_221013_154824.pdfDODDY LOMBARDO, ST, MM, CRP
 

Similar to Internal Controls over Financial Reporting in the Indian Context (20)

IFC Act White paper
IFC Act White paperIFC Act White paper
IFC Act White paper
 
Ch7 Quiz Questions And Solutions
Ch7 Quiz Questions And SolutionsCh7 Quiz Questions And Solutions
Ch7 Quiz Questions And Solutions
 
WIRC-IFC.pdf
WIRC-IFC.pdfWIRC-IFC.pdf
WIRC-IFC.pdf
 
Spire Brief - Risk Consulting
Spire Brief - Risk ConsultingSpire Brief - Risk Consulting
Spire Brief - Risk Consulting
 
Mcclain Plastics
Mcclain PlasticsMcclain Plastics
Mcclain Plastics
 
Assignment 3 Capstone Research ProjectDue Week 10 and worth.docx
Assignment 3 Capstone Research ProjectDue Week 10 and worth.docxAssignment 3 Capstone Research ProjectDue Week 10 and worth.docx
Assignment 3 Capstone Research ProjectDue Week 10 and worth.docx
 
Principle and Practice of Management MGT chap016
Principle and Practice of Management MGT chap016Principle and Practice of Management MGT chap016
Principle and Practice of Management MGT chap016
 
Question 1 1. The American Institute of Certified Public Account.docx
Question 1 1. The American Institute of Certified Public Account.docxQuestion 1 1. The American Institute of Certified Public Account.docx
Question 1 1. The American Institute of Certified Public Account.docx
 
IFC Knowldge Sharing 23.02.20 (1).pptx
IFC Knowldge Sharing 23.02.20 (1).pptxIFC Knowldge Sharing 23.02.20 (1).pptx
IFC Knowldge Sharing 23.02.20 (1).pptx
 
ACC 562 Enhance teaching / snaptutorial.com
ACC 562 Enhance teaching / snaptutorial.com ACC 562 Enhance teaching / snaptutorial.com
ACC 562 Enhance teaching / snaptutorial.com
 
Acc 562 Exceptional Education-snaptutorial.com
Acc 562 Exceptional Education-snaptutorial.comAcc 562 Exceptional Education-snaptutorial.com
Acc 562 Exceptional Education-snaptutorial.com
 
Audit & Assurance _MA-2023_Suggested_Answers.pdf
Audit & Assurance _MA-2023_Suggested_Answers.pdfAudit & Assurance _MA-2023_Suggested_Answers.pdf
Audit & Assurance _MA-2023_Suggested_Answers.pdf
 
Internal financial control
Internal financial controlInternal financial control
Internal financial control
 
Internal financial control
Internal financial controlInternal financial control
Internal financial control
 
intermediate-accounting.docx
intermediate-accounting.docxintermediate-accounting.docx
intermediate-accounting.docx
 
ACC 562 Final Exam
ACC 562 Final ExamACC 562 Final Exam
ACC 562 Final Exam
 
ACC 492 Education Specialist |tutorialrank.com
ACC 492 Education Specialist |tutorialrank.comACC 492 Education Specialist |tutorialrank.com
ACC 492 Education Specialist |tutorialrank.com
 
ACC 492 Education Specialist |tutorialrank.com
ACC 492 Education Specialist |tutorialrank.comACC 492 Education Specialist |tutorialrank.com
ACC 492 Education Specialist |tutorialrank.com
 
Assume you are the partner in an accounting firm hired to perform th.docx
Assume you are the partner in an accounting firm hired to perform th.docxAssume you are the partner in an accounting firm hired to perform th.docx
Assume you are the partner in an accounting firm hired to perform th.docx
 
Financial Integrity Sharing Session_BUMN_14Okt_221013_154824.pdf
Financial Integrity Sharing Session_BUMN_14Okt_221013_154824.pdfFinancial Integrity Sharing Session_BUMN_14Okt_221013_154824.pdf
Financial Integrity Sharing Session_BUMN_14Okt_221013_154824.pdf
 

More from Bharath Rao

Let the games begin - Insights into the Gaming Industry
Let the games begin - Insights into the Gaming IndustryLet the games begin - Insights into the Gaming Industry
Let the games begin - Insights into the Gaming IndustryBharath Rao
 
Internal Controls for Indian Financial Reporting using COBIT 5 based Guidance
Internal Controls for Indian Financial Reporting using COBIT 5 based GuidanceInternal Controls for Indian Financial Reporting using COBIT 5 based Guidance
Internal Controls for Indian Financial Reporting using COBIT 5 based GuidanceBharath Rao
 
Going global while being local
Going global while being localGoing global while being local
Going global while being localBharath Rao
 
The Next Gen Auditor - Auditing through technological disruptions
The Next Gen Auditor - Auditing through technological disruptionsThe Next Gen Auditor - Auditing through technological disruptions
The Next Gen Auditor - Auditing through technological disruptionsBharath Rao
 
Big data, Machine learning and the Auditor
Big data, Machine learning and the AuditorBig data, Machine learning and the Auditor
Big data, Machine learning and the AuditorBharath Rao
 
Base Erosion and Profit Shifting
Base Erosion and Profit ShiftingBase Erosion and Profit Shifting
Base Erosion and Profit ShiftingBharath Rao
 
Chartered Accountant going Global
Chartered Accountant going GlobalChartered Accountant going Global
Chartered Accountant going GlobalBharath Rao
 
Big Data Analytics and a Chartered Accountant
Big Data Analytics and a Chartered AccountantBig Data Analytics and a Chartered Accountant
Big Data Analytics and a Chartered AccountantBharath Rao
 
IS Audits and Internal Controls
IS Audits and Internal ControlsIS Audits and Internal Controls
IS Audits and Internal ControlsBharath Rao
 
Cloud Computing - Emerging Opportunities in the CA Profession
Cloud Computing - Emerging Opportunities in the CA ProfessionCloud Computing - Emerging Opportunities in the CA Profession
Cloud Computing - Emerging Opportunities in the CA ProfessionBharath Rao
 
Internal Controls over Indian Financial Reporting
Internal Controls over Indian Financial ReportingInternal Controls over Indian Financial Reporting
Internal Controls over Indian Financial ReportingBharath Rao
 
Big data - The next best thing
Big data - The next best thingBig data - The next best thing
Big data - The next best thingBharath Rao
 
Physical and logical access controls - A pre-requsite for Internal Controls
Physical and logical access controls - A pre-requsite for Internal ControlsPhysical and logical access controls - A pre-requsite for Internal Controls
Physical and logical access controls - A pre-requsite for Internal ControlsBharath Rao
 
Standards of Auditing - Introduction and Application in the Indian Context
Standards of Auditing - Introduction and Application in the Indian ContextStandards of Auditing - Introduction and Application in the Indian Context
Standards of Auditing - Introduction and Application in the Indian ContextBharath Rao
 
The CIA Triad - Assurance on Information Security
The CIA Triad - Assurance on Information SecurityThe CIA Triad - Assurance on Information Security
The CIA Triad - Assurance on Information SecurityBharath Rao
 
Business Continuity Planning
Business Continuity PlanningBusiness Continuity Planning
Business Continuity PlanningBharath Rao
 

More from Bharath Rao (17)

Let the games begin - Insights into the Gaming Industry
Let the games begin - Insights into the Gaming IndustryLet the games begin - Insights into the Gaming Industry
Let the games begin - Insights into the Gaming Industry
 
Internal Controls for Indian Financial Reporting using COBIT 5 based Guidance
Internal Controls for Indian Financial Reporting using COBIT 5 based GuidanceInternal Controls for Indian Financial Reporting using COBIT 5 based Guidance
Internal Controls for Indian Financial Reporting using COBIT 5 based Guidance
 
Going global while being local
Going global while being localGoing global while being local
Going global while being local
 
The Next Gen Auditor - Auditing through technological disruptions
The Next Gen Auditor - Auditing through technological disruptionsThe Next Gen Auditor - Auditing through technological disruptions
The Next Gen Auditor - Auditing through technological disruptions
 
Big data, Machine learning and the Auditor
Big data, Machine learning and the AuditorBig data, Machine learning and the Auditor
Big data, Machine learning and the Auditor
 
Base Erosion and Profit Shifting
Base Erosion and Profit ShiftingBase Erosion and Profit Shifting
Base Erosion and Profit Shifting
 
Chartered Accountant going Global
Chartered Accountant going GlobalChartered Accountant going Global
Chartered Accountant going Global
 
Forex markets
Forex marketsForex markets
Forex markets
 
Big Data Analytics and a Chartered Accountant
Big Data Analytics and a Chartered AccountantBig Data Analytics and a Chartered Accountant
Big Data Analytics and a Chartered Accountant
 
IS Audits and Internal Controls
IS Audits and Internal ControlsIS Audits and Internal Controls
IS Audits and Internal Controls
 
Cloud Computing - Emerging Opportunities in the CA Profession
Cloud Computing - Emerging Opportunities in the CA ProfessionCloud Computing - Emerging Opportunities in the CA Profession
Cloud Computing - Emerging Opportunities in the CA Profession
 
Internal Controls over Indian Financial Reporting
Internal Controls over Indian Financial ReportingInternal Controls over Indian Financial Reporting
Internal Controls over Indian Financial Reporting
 
Big data - The next best thing
Big data - The next best thingBig data - The next best thing
Big data - The next best thing
 
Physical and logical access controls - A pre-requsite for Internal Controls
Physical and logical access controls - A pre-requsite for Internal ControlsPhysical and logical access controls - A pre-requsite for Internal Controls
Physical and logical access controls - A pre-requsite for Internal Controls
 
Standards of Auditing - Introduction and Application in the Indian Context
Standards of Auditing - Introduction and Application in the Indian ContextStandards of Auditing - Introduction and Application in the Indian Context
Standards of Auditing - Introduction and Application in the Indian Context
 
The CIA Triad - Assurance on Information Security
The CIA Triad - Assurance on Information SecurityThe CIA Triad - Assurance on Information Security
The CIA Triad - Assurance on Information Security
 
Business Continuity Planning
Business Continuity PlanningBusiness Continuity Planning
Business Continuity Planning
 

Recently uploaded

Moradia Isolada com Logradouro; Detached house with patio in Penacova
Moradia Isolada com Logradouro; Detached house with patio in PenacovaMoradia Isolada com Logradouro; Detached house with patio in Penacova
Moradia Isolada com Logradouro; Detached house with patio in Penacovaimostorept
 
Mastering The Art Of 'Closing The Sale'.
Mastering The Art Of 'Closing The Sale'.Mastering The Art Of 'Closing The Sale'.
Mastering The Art Of 'Closing The Sale'.SNSW group8
 
What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...srcw2322l101
 
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.daisycvs
 
Elevate Your Online Presence with SEO Services
Elevate Your Online Presence with SEO ServicesElevate Your Online Presence with SEO Services
Elevate Your Online Presence with SEO ServicesHaseebBashir5
 
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...YourLegal Accounting
 
hyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statementshyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statementsirhcs
 
SCI9-Q4-MOD8.1.pdfjttstwjwetw55k5wwtwrjw
SCI9-Q4-MOD8.1.pdfjttstwjwetw55k5wwtwrjwSCI9-Q4-MOD8.1.pdfjttstwjwetw55k5wwtwrjw
SCI9-Q4-MOD8.1.pdfjttstwjwetw55k5wwtwrjwadimosmejiaslendon
 
First Time Home Buyer's Guide - KM Realty Group LLC
First Time Home Buyer's Guide - KM Realty Group LLCFirst Time Home Buyer's Guide - KM Realty Group LLC
First Time Home Buyer's Guide - KM Realty Group LLCTammy Jackson
 
The Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and UncertaintyThe Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and Uncertaintycapivisgroup
 
What are the differences between an international company, a global company, ...
What are the differences between an international company, a global company, ...What are the differences between an international company, a global company, ...
What are the differences between an international company, a global company, ...AbhishekSharma823325
 
Pitch Deck Teardown: Goodcarbon's $5.5m Seed deck
Pitch Deck Teardown: Goodcarbon's $5.5m Seed deckPitch Deck Teardown: Goodcarbon's $5.5m Seed deck
Pitch Deck Teardown: Goodcarbon's $5.5m Seed deckHajeJanKamps
 
HAL Financial Performance Analysis and Future Prospects
HAL Financial Performance Analysis and Future ProspectsHAL Financial Performance Analysis and Future Prospects
HAL Financial Performance Analysis and Future ProspectsRajesh Gupta
 
Sex service available my WhatsApp number 7374088497
Sex service available my WhatsApp number 7374088497Sex service available my WhatsApp number 7374088497
Sex service available my WhatsApp number 7374088497dipikakk482
 
Top^Clinic ^%[+27785538335__Safe*Women's clinic//Abortion Pills In Harare
Top^Clinic ^%[+27785538335__Safe*Women's clinic//Abortion Pills In HarareTop^Clinic ^%[+27785538335__Safe*Women's clinic//Abortion Pills In Harare
Top^Clinic ^%[+27785538335__Safe*Women's clinic//Abortion Pills In Hararedoctorjoe1984
 
MichaelStarkes_UncutGemsProjectSummary.pdf
MichaelStarkes_UncutGemsProjectSummary.pdfMichaelStarkes_UncutGemsProjectSummary.pdf
MichaelStarkes_UncutGemsProjectSummary.pdfmstarkes24
 

Recently uploaded (20)

Moradia Isolada com Logradouro; Detached house with patio in Penacova
Moradia Isolada com Logradouro; Detached house with patio in PenacovaMoradia Isolada com Logradouro; Detached house with patio in Penacova
Moradia Isolada com Logradouro; Detached house with patio in Penacova
 
WAM Corporate Presentation May 2024_w.pdf
WAM Corporate Presentation May 2024_w.pdfWAM Corporate Presentation May 2024_w.pdf
WAM Corporate Presentation May 2024_w.pdf
 
Mastering The Art Of 'Closing The Sale'.
Mastering The Art Of 'Closing The Sale'.Mastering The Art Of 'Closing The Sale'.
Mastering The Art Of 'Closing The Sale'.
 
What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...
 
Obat Aborsi Malang 0851\7696\3835 Jual Obat Cytotec Di Malang
Obat Aborsi Malang 0851\7696\3835 Jual Obat Cytotec Di MalangObat Aborsi Malang 0851\7696\3835 Jual Obat Cytotec Di Malang
Obat Aborsi Malang 0851\7696\3835 Jual Obat Cytotec Di Malang
 
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
Abortion pills in Muscut<Oman(+27737758557) Cytotec available.inn Kuwait City.
 
Elevate Your Online Presence with SEO Services
Elevate Your Online Presence with SEO ServicesElevate Your Online Presence with SEO Services
Elevate Your Online Presence with SEO Services
 
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...
How Bookkeeping helps you in Cost Saving, Tax Saving and Smooth Business Runn...
 
hyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statementshyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statements
 
SCI9-Q4-MOD8.1.pdfjttstwjwetw55k5wwtwrjw
SCI9-Q4-MOD8.1.pdfjttstwjwetw55k5wwtwrjwSCI9-Q4-MOD8.1.pdfjttstwjwetw55k5wwtwrjw
SCI9-Q4-MOD8.1.pdfjttstwjwetw55k5wwtwrjw
 
Obat Aborsi Pasuruan 0851\7696\3835 Jual Obat Cytotec Di Pasuruan
Obat Aborsi Pasuruan 0851\7696\3835 Jual Obat Cytotec Di PasuruanObat Aborsi Pasuruan 0851\7696\3835 Jual Obat Cytotec Di Pasuruan
Obat Aborsi Pasuruan 0851\7696\3835 Jual Obat Cytotec Di Pasuruan
 
First Time Home Buyer's Guide - KM Realty Group LLC
First Time Home Buyer's Guide - KM Realty Group LLCFirst Time Home Buyer's Guide - KM Realty Group LLC
First Time Home Buyer's Guide - KM Realty Group LLC
 
The Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and UncertaintyThe Art of Decision-Making: Navigating Complexity and Uncertainty
The Art of Decision-Making: Navigating Complexity and Uncertainty
 
What are the differences between an international company, a global company, ...
What are the differences between an international company, a global company, ...What are the differences between an international company, a global company, ...
What are the differences between an international company, a global company, ...
 
Pitch Deck Teardown: Goodcarbon's $5.5m Seed deck
Pitch Deck Teardown: Goodcarbon's $5.5m Seed deckPitch Deck Teardown: Goodcarbon's $5.5m Seed deck
Pitch Deck Teardown: Goodcarbon's $5.5m Seed deck
 
HAL Financial Performance Analysis and Future Prospects
HAL Financial Performance Analysis and Future ProspectsHAL Financial Performance Analysis and Future Prospects
HAL Financial Performance Analysis and Future Prospects
 
Sex service available my WhatsApp number 7374088497
Sex service available my WhatsApp number 7374088497Sex service available my WhatsApp number 7374088497
Sex service available my WhatsApp number 7374088497
 
Top^Clinic ^%[+27785538335__Safe*Women's clinic//Abortion Pills In Harare
Top^Clinic ^%[+27785538335__Safe*Women's clinic//Abortion Pills In HarareTop^Clinic ^%[+27785538335__Safe*Women's clinic//Abortion Pills In Harare
Top^Clinic ^%[+27785538335__Safe*Women's clinic//Abortion Pills In Harare
 
Obat Aborsi Depok 0851\7696\3835 Jual Obat Cytotec Di Depok
Obat Aborsi Depok 0851\7696\3835 Jual Obat Cytotec Di DepokObat Aborsi Depok 0851\7696\3835 Jual Obat Cytotec Di Depok
Obat Aborsi Depok 0851\7696\3835 Jual Obat Cytotec Di Depok
 
MichaelStarkes_UncutGemsProjectSummary.pdf
MichaelStarkes_UncutGemsProjectSummary.pdfMichaelStarkes_UncutGemsProjectSummary.pdf
MichaelStarkes_UncutGemsProjectSummary.pdf
 

Internal Controls over Financial Reporting in the Indian Context

Editor's Notes

  1. Control Environment The control environment sets the tone of an organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control, providing discipline and structure. Control environment factors include the integrity, ethical values and competence of the entity's people; management's philosophy and operating style; the way management assigns authority and responsibility, and organizes and develops its people; and the attention and direction provided by the board of directors. Risk Assessment Every entity faces a variety of risks from external and internal sources that must be assessed. A precondition to risk assessment is establishment of objectives, linked at different levels and internally consistent. Risk assessment is the identification and analysis of relevant risks to achievement of the objectives, forming a basis for determining how the risks should be managed. Because economic, industry, regulatory and operating conditions will continue to change, mechanisms are needed to identify and deal with the special risks associated with change. Control Activities Control activities are the policies and procedures that help ensure management directives are carried out. They help ensure that necessary actions are taken to address risks to achievement of the entity's objectives. Control activities occur throughout the organization, at all levels and in all functions. They include a range of activities as diverse as approvals, authorizations, verifications, reconciliations, reviews of operating performance, security of assets and segregation of duties. Information and Communication Pertinent information must be identified, captured and communicated in a form and timeframe that enable people to carry out their responsibilities. Information systems produce reports, containing operational, financial and compliance-related information, that make it possible to run and control the business. They deal not only with internally generated data, but also information about external events, activities and conditions necessary to informed business decision-making and external reporting. Effective communication also must occur in a broader sense, flowing down, across and up the organization. All personnel must receive a clear message from top management that control responsibilities must be taken seriously. They must understand their own role in the internal control system, as well as how individual activities relate to the work of others. They must have a means of communicating significant information upstream. There also needs to be effective communication with external parties, such as customers, suppliers, regulators and shareholders. Monitoring Internal control systems need to be monitored--a process that assesses the quality of the system's performance over time. This is accomplished through ongoing monitoring activities, separate evaluations or a combination of the two. Ongoing monitoring occurs in the course of operations. It includes regular management and supervisory activities, and other actions personnel take in performing their duties. The scope and frequency of separate evaluations will depend primarily on an assessment of risks and the effectiveness of ongoing monitoring procedures. Internal control deficiencies should be reported upstream, with serious matters reported to top management and the board.