...12 ITM423 IT operations, controls, reporting, and maintenance 12 ITM423 IT operations, controls, reporting, and maintenance As a project manager in charge of a specific project, management will look no further than your desk should the project fail. The project manager is accountable overall for the status and the success of the project. Upper management will not care if external factors caused the project to fail they will only see the money the company has lost and look to you for answers. For this reason, and many others an effective project manager should build project controls into their project as the work progresses. “Project Controls encompass the people, processes and tools used to plan, manage and mitigate cost and schedule issues and any risk events that may impact a project” (projectcontrolsonline.com). Implementing project monitoring and control measures allows the project manager to effectively understand and communicate the project’s progress (R, 2009). In order to effectively monitor and control a project the project manager must work towards promoting a culture of accountability and responsibility while cementing their authority. Maintaining effective accountability for a project starts with the organization, supervisor, or the person that assigns the project to the project manager. It is their responsibility to effectively communicate to the project manager the level of “authority they will be given for each project they manage (Charvat...
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...Controls for Information Technology and Reporting and Evaluation April Keller ACC/544 Instructor: September 11th, 2009 Controls for Information Technology The success of a business is determined by how effective its managers are in managing risk. Therefore, acquiring effective risk management helps to protect the company from losses because of poor accounting practices as well as fraudulent activities. Using good controls protect managers from liabilities that may arise when certifying financial statements used in annual reports because when these reports are issued, they are also a reflection of the company’s internal controls. The internal control process begins with management and the attitude that management portrays through the company. Manager duties include implementing the policies and procedures used within the company, these policies and procedures are also used to build the structure which is found within the internal control environment. Internal Control Reporting Options An audit report has three general functions used to report a company’s financial statements. These reports indicate whether the financial statements are presented in conformity with generally accepted accounting principles. Auditors use their reports to highlight any unusual aspects of the audit examination, and the reports can be used to communicate useful information to decision makers that may not appear on the face of the financial statements. Internal reporting...
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...Controls for Information Technology The success of a business is determined by how effective its managers are in managing risk. Therefore, acquiring effective risk management helps to protect the company from losses because of poor accounting practices as well as fraudulent activities. Using good controls protect managers from liabilities that may arise when certifying financial statements used in annual reports because when these reports are issued, they are also a reflection of the company’s internal controls. The internal control process begins with management and the attitude that management portrays through the company. Manager duties include implementing the policies and procedures used within the company, these policies and procedures are also used to build the structure which is found within the internal control environment. Internal Control Reporting Options An audit report has three general functions used to report a company’s financial statements. These reports indicate whether the financial statements are presented in conformity with generally accepted accounting principles. Auditors use their reports to highlight any unusual aspects of the audit examination, and the reports can be used to communicate useful information to decision makers that may not appear on the face of the financial statements. Internal reporting options are important in keeping regulators, investors, and employees informed, and the format should be understandable for managers...
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...Controls for Information Technology (IT) and Reporting and Evaluation Jami L. Valek ACC-544 January 28, 2013 Christine Errico Controls for Information Technology (IT) and Reporting and Evaluation Information Technology (IT) controls are activities that are specifically performed to ensure that business objectives are met through the use of people and systems. IT control objectives are related to the business enterprise’s confidentiality, integrity, availability of data, and the overall management of the IT functions. There are two types of IT controls: IT general controls, which are controls over the IT environment, computer operations, access to programs and data, program development and program changes; and IT application controls, which refer to transaction processing controls (“Information Technology Controls”, 2013). IT General Controls are the foundation of a company’s IT control structure. With IT General Controls, data that is generated can be deemed more reliable and assertion that systems are operating as intended is supported. IT General Controls usually include controls that are designed to: * Shape the corporate environment through control environment; * Ensure that changes are authorized and meet business requirements through changes in management procedures; * Protect the integrity of program controls through source code/document version controls procedures; * Ensure effective management of IT projects through software development life...
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...internal control Qver Financial Reporting CASES INCLUDED iN THIS SECTiON 1. Simply Steam, Co. 155 Evaluation of Internal Control Environment 2. Easy Clean, Co. 155 Evaluation of Internal Control Environment 3. Red Bluff Inn & Café 165 Establishing Effective Internal Control in a Small Business 4. St. James Clothiers 169 Evaluation of Manual and IT-Based Sales Accounting System Risks 5. Collins Harp Enterprises 177 Recommending IT Systems Development Controls 6. Sarbox Scooter, Inc. 185 Scoping and Evaluation Judgments in the Audit of Internal Control over Financial Reporting 7. Société Générale 195 How a Low-Risk Trading Area Caused a $7.2 Billion Loss case5.!-2 Easy Clean/Simply Steam, Co. Evaluation of Internal Control Environment Mark S. Beasley • Frank A. Buckless • Steven M. Glover • Douglas F. Prawitt INSTRUCTIONAL OBJECTIVES 1] To reinforce aspects relevant to the internal control environment. 2] To illustrate the degree of judgment involved in making internal control environment evaluations. 3] To provide students experience in making subjective evaluative judgments. 4] To provide a forum to discuss inquiry techniques as well as inquiry as a form of audit evidence. 5] To provide students direct experience with, and discovery of, issues surrounding the control environment, making inquiries, and the framing (e.g., positive or negative) of information provided by management. 6] To illustrate...
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...STUDY 2 MODULE II 1. Biltrite’s strengths and weaknesses in the internal control Assertion Sale Processing Flowchart: Weakness A. The office was uninformed about the credit approval - Valuation B. Missing customer information and product validation - Valuation C. Invoices were mailed before shipping the goods - Existence And does not matched with bill of lading D. Bill of ladings are not pre numbered - Completeness Strength Good internal control for receivables aging analysis and Follow up of delinquent accounts. Cash Receipts Processing Flowchart: Weakness E. Unrestricted customer check endorsement - Valuation F. Unable to edit and apply discounts and correct net amount - Valuation Purchases and Accounts Payable: Weakness G. Need approval for the prepared voucher for proper -Valuation Account distribution Strengths H. Verifies details on goods received with the receiving report I. Matching control tape with purchase summary for the processed invoices Payment Processing Flowchart: Strengths J. Matching the checks with the documents, amount and remittance details K. Checks are reviewed before signing for approval. L. Cancelled checks/documents to avoid duplication. M. Mailed check directly to vendors after signing the checks. Biltrite’s strengths and weaknesses in the internal control Assertion Payroll Processing Flowchart: Weakness N. Supervisor approves...
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...CHIEF FINANCIAL OFFICERS, CHIEF OPERATION OFFICERS, CHIEF INFORMATION OFFICERS, AND PROGRAM MANAGERS FROM: Linda M. Springer Controller SUBJECT: Revisions to OMB Circular A-123, Management’s Responsibility for Internal Control OMB Circular No. A-123 defines management's responsibility for internal control in Federal agencies. A re-examination of the existing internal control requirements for Federal agencies was initiated in light of the new internal control requirements for publicly-traded companies contained in the Sarbanes-Oxley Act of 2002. Circular A-123 and the statute it implements, the Federal Managers’ Financial Integrity Act of 1982, are at the center of the existing Federal requirements to improve internal control. This circular reflects policy recommendations developed by a joint committee of representatives from the Chief Financial Officer Council (CFOC) and the President’s Council on Integrity and Efficiency (PCIE). The policy changes in this circular are intended to strengthen the requirements for conducting management’s assessment of internal control over financial reporting. The circular also emphasizes the need for agencies to integrate and coordinate internal control assessments with other internal control-related activities. The revised circular is effective for FY 2006. Agencies should take steps in FY 2005 to prepare for its implementation. OMB plans to continue to work closely with the CFOC and the PCIE to provide further implementation...
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...Guide to Internal Control Over Financial Reporting The Center for Audit Quality prepared this Guide to provide an overview for the general public of internal control over financial reporting (“ICFR”). The Guide explains what public company ICFR is and describes management’s responsibility for implementing effective ICFR. The Guide also discusses the responsibilities of the audit committee to oversee ICFR and of the independent auditor to audit the effectiveness of the company’s ICFR. A Guide to Internal Control Over Financial Reporting P reparing reliable financial information is a key responsibility of the management of every public company. The ability to effectively manage the company’s business requires access to timely and accurate information. Moreover, investors must be able to place confidence in a company’s financial reports if the company wants to raise capital in the public securities markets. Management’s ability to fulfill its financial reporting responsibilities depends in part on the design and effectiveness of the processes and safeguards it has put in place over accounting and financial reporting. Without such controls, it would be extremely difficult for most business organizations — especially those with numerous locations, operations, and processes — to prepare timely and reliable financial reports for management, investors, lenders, and other users. While no practical control system can absolutely assure that financial reports...
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...Overview of PCAOB Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements Provided for use with Auditing and Assurance Services: An Integrated Approach, 12th edition Alvin A. Arens, Randal J. Elder, Mark A. Beasley Pearson Prentice Hall, Inc. INTRODUCTION The 12th Edition of Auditing and Assurance Services: An Integrated Approach, includes extensive coverage of key provisions of the Sarbanes-Oxley Act (the Act) and related Public Company Accounting Oversight Board (PCAOB) standards and rules applicable to the audits of financial statements and internal control over financial reporting for public companies. At the time the 12th Edition was released in March 2007, the PCAOB had issued Auditing Standard Nos. 1-4. On May 24, 2007, the PCAOB issued Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements (AS5). Subject to SEC approval, AS5 is effective for audits of fiscal years ending on or after November 15, 2007. AS5 supersedes PCAOB Auditing Standard No. 2 (AS2), An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements, which was issued in June 2004. The PCAOB and the Securities and Exchange Commission (SEC) have closely monitored the implementation of AS2 to evaluate the effectiveness of public company auditors in applying the provisions to audits...
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...Proposed Statement of Financial Accounting Concepts Issued: March 11, 2010 Comments Due: July 16, 2010 Conceptual Framework for Financial Reporting: The Reporting Entity This Exposure Draft of a proposed Statement of Financial Accounting Concepts is issued by the Board for public comment. Written comments should be addressed to: Technical Director File Reference No. 1770-100 Responses from interested parties wishing to comment on the Exposure Draft must be received in writing by July 16, 2010. Interested parties should submit their comments by email to director@fasb.org, File Reference No. 1770-100. Those without email may send their comments to the “Technical Director, File Reference No. 1770-100, FASB, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116.” Do not send responses by fax. Please send only one comment letter to either the FASB or the International Accounting Standards Board (IASB), which is also requesting comments on this jointly issued Exposure Draft. The FASB and the IASB will share and consider jointly all comment letters received. Comments are most helpful if they: a. b. c. Indicate the specific paragraph or paragraphs to which the comments relate Contain a clear rationale Include any alternative the Boards should consider. All comments received constitute part of the FASB’s public file. The FASB will make all comments publicly available by posting them to its website and by making them available in its public reference room in Norwalk, Connecticut. An...
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...in corporate financial reporting, the United States Congress passed legislature in 2002 that required publicly traded companies to contain within each annual report an internal control report. The internal control report requires companies to state the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting. The internal control report must also contain an assessment of the effectiveness of the internal control structure and procedures of the issuer for financial reporting. These rules are referred to as and contained in Section 404 of the Sarbanes Oxley Act (“SOX”). This paper will touch upon an introduction to the SOX Act,...
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...stepping stone in that movement and has impacted many public companies. SOX requires public companies registered with the Securities Exchange Commission to evaluate the effectiveness of its internal control over financial reporting and disclose this information in its financial statements. For instance, Dell Inc., a large multinational IT corporation, was one of the many large corporations affected by the implications of SOX. First, Section 404 of SOX requires Dell’s management, under the supervision of the CEO and CFO, to establish and maintain adequate internal control in accordance with the rules defined in the Securities Exchange Act. In addition to establishing the controls, they are also required to evaluate the effectiveness of the controls against the criteria established in the Internal Control-Integrated Framework issued by COSO. Second, Section 409 of SOX requires management to disclose material changes in internal control, and the results or potential effects of those changes. Finally, Section 404 of SOX requires Dell’s auditing firm to evaluate management’s assessment of Dell’s internal control and to issue an opinion on the quality and accuracy of the assessment. All in all, SOX raised corporate responsibility to assess and improve internal control over financial reporting. It also...
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...Entity-level controls are tested by the auditor to conclude whether the company has effective internal control over financial reporting. Entity controls vary in nature and include; Controls that are related to the control environment- the editor must evaluate the control environment of the company because they are important they are important to effective internal control over financial reporting. The following is assessed as part of evaluating the control environment; whether there is promotion of effective internal control over financial reporting by the management’s philosophy and operating style, whether there is development and understanding of the sound integrity and ethical values particularly on top of management, and whether there is exercising and understanding of the oversight responsibility over financial reporting and internal control by the Board or audit committee. Certain control environment controls, have an important, but indirect, effect on the likelihood that a misstatement will be detected or prevented on a timely basis. These controls might affect the other controls the auditor selects for testing and the nature, timing, and extent of procedures the auditor performs on other controls. Controls over management override- these are important to effective internal control over financial reporting for all companies, and may be particularly important at smaller companies because of the increased involvement of senior management in performing controls and in the...
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...Internal control, internal audit and risk management Internal control is under the Board of Director's responsibility. Internal control's function is, among other things, to ensure the efficiency and profitability of operations, the reliability of information, and adhering to rules and regulations. Internal control is a part of day-to-day management and company administration. An essential part of internal control is the Internal Audit, which operates as a separate unit under the CEO and reports its observations to the Board of Directors. The Internal Audit supports the Group's/ Company’s management in directing operations by inspecting and evaluating the efficiency of business operations, risk management and internal control, and by producing information and recommendations to enhance efficiency. The Internal Audit also inspects the processes of business operations and financial reporting. Internal Audit's directive have to be approved by the Group’s / Company’s Board of Directors. The operations of the Internal Audit are guided by being risk-focused and emphasizing the development of business operations. Risk management The goal of risk management is to secure the Group's / Company’s earnings development and to ensure that the Group/Company operates without any disturbances by controlling risks in a cost efficient and systematic manner in all divisions/departments. The Board of Directors must approve the Group’s / company's risk management principles, which concern...
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...Controls for InformationTechnology and Reporting and Evaluation Julie Strange University of Phoenix ACC/544 Internal Control Systems Christina Yang October 24, 2011 Controls for Information Technology The success of a business is determined by how effective its managers are in managing risk. Therefore, acquiring effective risk management helps to protect the company from losses because of poor accounting practices as well as fraudulent activities. Using good controls protect managers from liabilities that may arise when certifying financial statements used in annual reports because when these reports are issued, they are also a reflection of the company’s internal controls. The internal control process begins with management and the attitude that management portrays through the company. Manager duties include implementing the policies and procedures used within the company, these policies and procedures are also used to build the structure which is found within the internal control environment. Internal Control Reporting Options An audit report has three general functions used to report a company’s financial statements. These reports indicate whether the financial statements are presented in conformity with generally accepted accounting principles. Auditors use their reports to highlight any unusual aspects of the audit examination, and the reports can be used to communicate useful information to decision makers that may...
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