OR Internal Controls What Are They And Why Should I Care?
Transcript of OR Internal Controls What Are They And Why Should I Care?
![Page 1: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/1.jpg)
ORInternal Controls
What Are TheyAnd
Why Should I Care?
1
![Page 2: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/2.jpg)
Three Concepts that Supervisors should understand:
1. The supervisor is responsible for the internal controls in their area.
2. The supervisor’s attitude significantly impacts their employees attitude.
3. The supervisor designs the internal control system.
2
![Page 3: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/3.jpg)
3
![Page 4: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/4.jpg)
Control Environment
Foundation for Good Internal Controls
4
![Page 5: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/5.jpg)
It is important to understand that your attitude as the supervisor will set the standard that will impact the actions of your employees.
5
![Page 6: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/6.jpg)
Allowing conditional adherence to rules and regulations sends a message to your employees that rules can be ignored.
6
![Page 7: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/7.jpg)
Control Environment or Ethical Climate is Established by:
Examples set by leadersCore values of the institutionRewarding those who appropriately raise issues
7
![Page 8: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/8.jpg)
Management Ensures that:
Information and communication flows freely between employees and the supervisor.
Management is responsive.
Responsibilities are well defined and reasonable.
Employees are given the necessary tools to do their job.
8
![Page 9: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/9.jpg)
It is important that our communications with our employees are clear and
consistent. Be careful that the messages you send verbally are consistent with written policies.
9
![Page 10: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/10.jpg)
Risk Assessment
Control Environment
10
Identify What Needs to be Protected
![Page 11: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/11.jpg)
Protecting assets.
Ensuring Accuracy of records.
Promoting operational efficiency.
Encouraging adherence to policies, rules, regulations, and laws.
Reducing the opportunity for fraudulent activity.
11
Consideration should be given to:
![Page 12: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/12.jpg)
Personal Controls:Lock homes & vehiclesKeep PIN numbers secureKeep checkbooks and cash secureReview bills before paying
University Controls:Lock offices & cabinetsKeep passwords confidentialCheck stock is kept in a secure locationSupporting documentation for transactions should be reviewed
12
![Page 13: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/13.jpg)
Control Activities
Risk Assessment
Control Environment
Actions Taken to Control Risk
13
![Page 14: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/14.jpg)
1. Ensuring Employees have appropriate: System Access Physical Access (Keys) Safe Combinations
2. All Access is Terminated when Employees Leave
3. Duties are Segregated4. A System for Authorizing
Activities is Developed
14
![Page 15: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/15.jpg)
Reconciliations
Logs
Checklists
Backup procedures
Contracts
15
![Page 16: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/16.jpg)
One person’s responsibilities are restricted so that they can’t both cause and conceal errors. For example one person doesn't record the transaction, make the deposit, and reconcile the bank statement.
16
![Page 17: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/17.jpg)
Monitoring
Control Activities
Risk Assessment
Control Environment
Ensures Control System is Functioning Appropriately
17
![Page 18: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/18.jpg)
Status and Exception Reports
Process Reviews– Departmental
– Internal Audit
– External Review
Feedback processes– Hotlines
– Surveys
– Employees/Customers
18
![Page 19: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/19.jpg)
Internal Audit is located in Old Main, Room 415
For additional information, please contact the Internal Audit Department
Kathleen Miller, CIA, Internal [email protected]: 766-2385Danika Salmans, Senior [email protected]: 766-4835
19
![Page 20: OR Internal Controls What Are They And Why Should I Care?](https://reader033.fdocuments.net/reader033/viewer/2022041609/6252f777ae3c287cf514b7fa/html5/thumbnails/20.jpg)
20