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The auditor will have to review and Evaluation the internal control
Summary: Skilled, well-informed and motivat...
Procedures to evaluate internal controls:
*Description of system of internal control
*Internal Control Questio...
Mohammad Wahid Abdullah Khan (MBA, CPFA, CPIA, CFC)
Dhaka, Bangladesh
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The auditor will have to review and evaluation the internal control structure.


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The auditor will have to review and evaluation the internal control structure.

  1. 1. The auditor will have to review and Evaluation the internal control structure. 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 categories 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 following: *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 environment. 1
  2. 2. Procedures to evaluate internal controls: *Description of system of internal control *Flowcharts *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 their responsibilities. 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: 2
  3. 3. Mohammad Wahid Abdullah Khan (MBA, CPFA, CPIA, CFC) Dhaka, Bangladesh Home Page: 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 Professional Membership: • 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 . 3