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Hello Ken,
I really don’t have much working experience and I’m really finding it challenging to come up with practical recommendations to internal control deficiencies and also suggesting good internal control systems an entity could adopt.
Any pointers please? It’d be pointless to memorise lists of actions if I can’t think on my feet of possible answers.
Usually when you find a deficiency fixing it is easy. Finding the deficiencies is harder.
To find those think:
1 What could go wrong? Documents mislaid, wrong amounts transcribed, incorrect calculations, wrong goods dispatched/bought, assets stolen etc.
2 You want to ensure that there is a complete audit trail from the start to the end of the transaction so that everything can be traced both forwards and backwards.
So if the deficiency is:
1 Documents might get lost…then…make the documents sequentially prenumbered so that they can be checked for completeness
2 Wrong calculations… have then independently recalculated
3 Assets at risk from theft…lock them away
4 Unauthorised purchases/sales/overtime/…..have someone authorise the transaction
5 Despatches but no invoices following….match copy despatch notes to copy invoices.
etc.
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