Internal Controls Policies and Procedures E-Book

Rose Hightower

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 239

Veröffentlichungsjahr: 2008

Beschreibung

Drawing on her many years as a consultant to numerous companies big and small, author Rose Hightower infuses Internal Controls Policies and Procedures with her wealth of experience and knowledge. Instead of reinventing the wheel, your company can use this useful how-to manual to quickly and effectively put a successful program of internal controls in place. Complete with flowcharts and checklists, this essential desktop reference is a best practices model for establishing and enhancing your organization's control framework.

These manuals are favorites for organizations and companies that need a foundation and grounding to ensure an internal control posture of integrity, credibility, method, process and process: or a reminder of its importance. 

URLs were included when first published to encourage the dissemination and distribution of relevant chapters to those interested and in charge of the specific departments.  

Although times have changed, the principles professed are sound and solid for today’s accounting and business environment.  Implementing these cornerstones will produce a principled manageable approach. 

These manuals can be used by accounting individuals, finance departments, sole proprietor businesses, large corporations, accounting / auditing students and any others interested in specific topics or general disciplines.

The discipline for the oversight processes and procedures are important when introducing or implementing auditing practices whether in accounting or throughout the organization. 

These manuals should be used together to provide the basics when setting up a department or specific process discipline, for learning about the strengths, weaknesses and opportunities within the specific focus areas.

Leseprobe

Table of Contents

Title Page

Copyright Page

About the Author

About the Web Site

How to use this Manual

Preface

GOVERNANCE JOURNEY

BIG G TO LITTLE g GOVERNANCE JOURNEY

Flowcharting the Governance Journey

APPENDIX - SOME BACKGROUND INFORMATION ON COSO, SOX AND PCAOB

RISK ASSESSMENT

Exercise in Evaluating Process Risk

OVERSIGHT

DOCUMENTATION

READINESS CHECKLIST FOR DOCUMENTATION

INTERNAL CONTROL PROGRAM

INTERNAL CONTROLS PROGRAM

Program versus Process

Example:

Financial, Operational, and Performance Risk, Controls, and Testing

Internal Control over Financial Reporting

APPENDIX SELF-ASSESSMENT FOR THE INTERNAL CONTROL FRAMEWORK ACCORDING TO COSO

INTERNAL CONTROL PROCESS

Narrative for the Process

Internal Control Principles and Control Objectives

Determining the Scope Using a Top-Down approach

Detective and Preventive Controls

Example:

Control Activities

Monitoring and Testing

Classify Findings

Evaluating the Internal Control Program

Submissions and Attestations

INTERNAL CONTROL PLAN

Control Activity/Testing Engagement

ROLES AND RESPONSIBILITIES

Control Environment Representing Management Oversight

Risk Assessment

Control Activities

Information and Communication

Monitor, Evaluate, and Report

INTERNAL CONTROL - PLANNING, TESTING AND REMEDIATION WORKSHEET

Process/Account

Control Objective/Risk

Control Activity

Sample Size and Results of Testing

Control in Place

Process Owner

Remediation Actions

Next Follow-up Date or Due Date

AUTHORIZATION AND APPROVAL PROGRAM

Defining the Terms

Delegation of Authority

RASCI

SUBDELEGATION-OF-AUTHORITY MATRIX

Roles and Responsibilities

Areas with Worldwide Authority

RESPONSIBILITY, AUTHORITY, SUPPORT, COUNSEL, AND INFORM (RASCI)

INFORMATION TECHNOLOGY PROGRAM

END-USER COMPUTING AND SPREADSHEET CONTROL

ACCOUNT RECONCILIATION PROGRAM

Format and Analysis Techniques

QUARTERLY SUBCERTIFICATION PROGRAM

OVERVIEW

MATRIX AND LETTER

1) Matrix

Steps to Customize the Matrix

2) Letter

Schedule

Quarterly Subcertification

QUARTERLY SUBCERTIFICATION SECTION 404 QUESTIONNAIRE

QUARTERLY SUBCERTIFICATION - MATRIX

Instruction

QUARTERLY FINANCIAL SUBCERTIFICATION TRAINING FOR FIRST-TIME SUBCERTIFIERS

CONTROL ACTIVITY PROGRAM TESTING GUIDES

CONTROL ACTIVITY PROGRAM

Instruction for Building Your Testing Guide

Instruction for Completing the Result of Control Activity Testing Form

Monitoring and Tracking

Remediation

Reporting

Instructions to Complete the Internal Controls-Reporting Scorecard

Internal Control Planning, Testing, and Remediation Worksheet

INTERNAL CONTROL—PLANNING, TESTING, AND REMEDIATION WORKSHEET

Process/Account

Control Objective/Risk

Control Activity

Sample Size and Results of Testing

Control in Place

Remediation Actions

Next Follow-up Date or Due Date

Appendix

Acronyms

References

Index

This book is printed on acid-free paper.

Copyright © 2009 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Hightower, Rose. Internal controls policies and procedures / Rose Hightower. p. cm. Includes bibliographical references and index.

eISBN : 978-0-470-44941-7

1. Auditing, Internal. 2. Corporate governance. 3. Managerial accounting. I. Title. HF5668.25.H54 2009 657’.458—dc22 2008022105

About the Author

Rose Hightower

Rose is an accountant, professor, author and owner of IDEAL Consulting Solutions International, LLC. She earned an Accounting degree while in Canada and a Master’s degree from Syracuse University. Rose has lived and worked in Toronto and New York.

As an energetic, proactive program manager with extensive Fortune 500 experience in identifying and resolving challenges in finance, process management and organizational development. Her career reflects results-oriented leadership with strong creative problem solving and analytical skills. Rose has over 30 years of business experience working with small, medium and corporate clients to improve their efforts and direction in leadership development.

As an accountant, Rose has participated, managed and had oversight responsibilities within various accounting and finance departments including twenty years at IBM, identifying and resolving challenges in finance, process management and organizational assessment.

IDEAL Consulting Solutions International, LLC a business specializing in redesigning accounting and finance processes, providing tools and skills necessary to improve business operations. The IDEAL™ philosophy is to provide valued added assessments and transfer skill. Current projects include the design and implementation of documentation programs improving them to address significant accounting deficiencies.

With a life long interest in learning, Rose has taught the mechanics of accounting and finance to college and university students within Canada and the States. Teaching has kept her interest and excitement about the topic fresh and current and combining her real world experience with textbook concepts has provided a additional value to her students.

Rose is the author of Accounting and Finance Policies and Procedures also published by John Wiley and Sons and which serves a prequel and companion to this manual. Within these manuals, she packages current research and proven experience in a ready to use solutions.

You may contact the author by visiting www.idealpolicy.com.

About the Web Site

As a purchaser of this manual, Accounting and Finance Policies and Procedures, you have access to the supporting web site: www.wiley.com/go/icpolices

The web site contains everything within the book. This download is an accumulation of Microsoft Word, Excel, and PowerPoint documents.

The password to enter this site is: controls

How to use this Manual

Whether you are a large public for-profit corporation or a small independent, there is benefit and value in adopting an internal control program.

This manual is structured as the final product and includes everything you need to document your internal controls program. These documents must be customized and adapted to fit into your company’s culture and environment. Throughout the manual there are exercises that, when complete, will assist by providing input to the internal control program and determining your company’s internal control posture. Using the URL, www.wiley.com/go/icpolicies download the book and customize it. Follow the document layout and adjust the scope and process flow using your Company’s language and procedure. Everything contained within the book is contained within the URL download.

In addition to considering this manual a reference or a “how to,” use it as a workbook. As you read through the chapters, perform the exercises to deepen your awareness, identify and prioritize your strategies, and enable employees to be part of the solution. As you review this manual, complete the exercises as you go and you will have a customized internal control program and plan.

In addition to providing some background as to why internal controls are important, this manual includes internal control program-specific policies, procedures, and testing guides—basically everything you need to launch an internal control program. This manual is a companion book to the Accounting and Finance Policy and Procedure manual also offered by John Wiley & Sons and available at www.wiley.com/WileyCDA/WileyTitle/productCd-0470259620.html.

This download is an accumulation of Microsoft word, Excel, and PowerPoint documents and Visio charts named and numbered in accordance with the Table of Contents. The downloadable files are distributed on an “as is” basis without warranties.

This download is available for your personal use within your company and must not be further distributed or used for resale. Permission to download the manual is achieved by procuring the book. This book and the downloadable version contain general information and are not intended to address specific circumstances or requirements. The author does not give any warranties, representations, or undertakings, expressed or implied, about the content’s quality or fitness for a particular purpose.

For additional program information or support, contact me as the Policyguru via [email protected] or visit www.idealpolicy.com.

Preface

To: Chief Financial Officer, Chief Compliance Officer, and Internal Control Program Manager

Do you worry about . . .

• Achieving objectives?

• Being resilient enough to adapt to change in time?

• Managing risks intelligently?

• Recognizing opportunities?

Do you know where your risks are and how to prioritize them? Does your staff have the resources and support they need to recognize and mitigate these risks? Could your company benefit from improved accounting and finance processes?

Having a strong internal control department enables managements to deal with rapidly changing economic and competitive environments, shifting customer demands and priorities and identifying when and where to restructure for future growth.

This manual is brought to internal control, accounting, and finance leaders and professionals who are tasked with implementing a program that will:

• Identify opportunities for effectiveness and efficiencies and reduce risk

• Engage the workforce

• Comply with external governance and reporting requirements such as Securities and Exchange Commission reporting and Sarbanes-Oxley compliance

The Internal Controls department is tasked with a role and responsibility that is more than just governance, risk, and oversight. This manual deals with those topics and presents tools and techniques which can address CEO/CFO worries.

Internal control is more than a role and responsibility; it is a philosophy, culture, and way of thinking. This manual integrates the governance objectives with internal control basics and provides tools and techniques which when applied provide valuable information to the executive leadership and other stakeholders.

As I began researching and preparing this manual, I realized that most large public companies were using and describing the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework in the same way. That is both good and bad news. The good news is that there is considerable evidence and proof that the COSO framework is the generally accepted standard and that there is a consistent look and feel to customized manuals. Internal control program managers become subject matter experts on implementing the framework.

The difficult news for an author is on how to make this subject matter fresh and new. So, although the lists may seem familiar, I hope I bring a fresh, new commonsense approach to applying the framework. Since my strength is in accounting and finance processes and process management, my philosophy is to embed COSO into the very processes we live and work with every day.

Whether you are a large public company or a small independent, the philosophy and approach will add value to your bottom line. The approach is based on laws and regulations and follows a commonsense approach to applying continuous process improvement techniques.

This manual is made up of three parts and includes a discussion of the governance journey, the internal control program, and the internal control testing guides. The manual contains exercises, self-assessments, and various other tools and techniques that can and should be adapted to your control environment.

Many of the concepts presented have been part of the repertoire of the best process-driven companies with the tools and techniques used in other proven models and approaches. This manual brings these concepts together in a fresh way ready for customization and implementation and aimed to achieve bottom-line results. There will be references to Sarbanes-Oxley and COSO; you may recognize the style of self-assessment tools, process management, and project management techniques. These all come together as a road map to implement or refresh your internal control program.

The documents should be used as a starting point for constructing, revitalizing, or documenting your company’s internal control program. The program and the testing guides must be personalized and customized to meet your company’s needs. Replace my company’s (IDEAL, LLP; used only at the beginning of some documents) name with your company’s name. Follow the document layout and adjust the scope and process flow using your company’s language and procedure.

Welcome to an exciting process. As you work through the process, the outcomes will present you with insights and opportunities about your company that you may not be currently aware of. Use this manual as a starting point to assess the maturity of the internal controls program. As you address each of the processes, if the documentation process comes “easily” (i.e., is currently available, is followed by most if not all of your company’s subsidiaries and locations; is measured and used as a basis for continuous process improvement) then the process is very mature and there should be no surprises.

Whether you use this manual as a reference, workbook, or guide, congratulations on taking this step and acquiring this valuable resource.

RoseRose Hightower [email protected] www.idealpolicy.com

GOVERNANCE JOURNEY