Internal Controls and Control Risk Assessment - Auditing

Content:
00:25 Adequate Internal Control
00:57 Internal Control Defined
01:23 Objectives of internal control: Reliability
02:05 Enhancing effectiveness and efficiency of financial operations
02:43 Compliance Objective
03:21 Limitations of Internal Control
05:01 How should auditors handle the limitations
06:01 Responsibility for internal control
06:16 Management's responsibility for internal control
07:49 Auditor's responsibility for internal control
09:11 Summary: Responsibility for internal control
09:42 Relationship between internal control and nature/timing and extent of audit procedures
10:59 How should auditors perform auditing based on inference from internal control relationship: High/low reliance
12:54 Components of Internal control: integrated framework
13:30 Components: 5 key components
13:46 Component 1: Control Environment
Example: Financial transparency and ethical standards
14:50 Audit Committee
15:10 Component 2: Risk Component
15:56 Example: Risk Assessment
16:50 Component 3: Control Activities
17:35 Control Activities: Physical safeguards
18:05 Adequate Segregation of duties
18:47 Example: segregation of duties in Retail business
20:18 Segregating custody of related assets
20:47 Example: medical clinic (Segregating custody of related assets)
21:56 Segregation Operation Responsibility
22:23 Example: Manufacturing sector (Segregation Operation Responsibility)
23:30 Segregating IT duties
25:18 Information processing Control activities
25:38 Approval and authorization control activities
26:37 Verification and reconciliation activities
27:49 Performance review activities
28:32 Preventive vs detective internal control
29:09 Example: Three-way match accounts (Preventive):
• Documentation: Purchase order, receiving record, vendor invoice
30:30 Detective Internal Control
31:12 Combination of Preventive and Detective internal controls
31:43 Summary
32:13 Information and Communication
32:40 Example: Identifying relevant information
33:17 Monitoring Activities: audit of financial properties and procedures
About Speaker:
Professor Helen Brown-Liburd is a tenured Associate Professor and the Associate Director of the Continuous Auditing & Reporting Lab (CAR Lab) at Rutgers Business School (RBS) in Newark, NJ.
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