Matakuliah : F0712 / Lab Sistem Informasi Akuntansi
Tahun
: 2007
Internal Control
Pertemuan 05 s.d 06
Internal Control and Accountants’ Roles
Accountants as
Managers –
Sarbanes-Oxley Act of 2002 and Standard No. 2 of
the Public Company Accounting Oversight Board
(PCAOB) requires:
– Management to prepare a statement describing
and assessing the company’s internal control
system
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Internal Control and Accountants’ Roles
Sarbanes-Oxley Act of 2002 and Standard No. 2 of
the Public Company Accounting Oversight Board
(PCAOB) requires:
– Annual reports of public companies to include:
(1) a statement that management is responsible
for internal controls over financial reporting,
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Internal Control and Accountants’ Roles
Sarbanes-Oxley Act of 2002 and Standard No. 2 of
the Public Company Accounting Oversight Board
(PCAOB) requires:
– Annual reports of public companies to include:
(2) a statement identifying the framework used
by management to evaluate internal
controls,
Bina Nusantara
Internal Control and Accountants’ Roles
Sarbanes-Oxley Act of 2002 and Standard No. 2 of
the Public Company Accounting Oversight Board
(PCAOB) requires:
– Annual reports of public companies to include
(3) an assessment of internal controls and
disclosure of any material weaknesses,
and
Bina Nusantara
Internal Control and Accountants’ Roles
Sarbanes-Oxley Act of 2002 and Standard No. 2 of
the Public Company Accounting Oversight Board
(PCAOB) requires:
– Annual reports of public companies to include:
(4) a statement that a public accounting firm has
issued an attestation report on
management’s assessment of internal
control.
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Internal Control and Accountants’ Roles
Accountants as
Users –
Must understand a company’s internal
controls to apply them correctly.
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Internal Control and Accountants’ Roles
Accountants as
Designers of internal control procedures –
Must understand a company’s internal
controls in working to achieve to compliance
with regulations and company objectives and
to minimize risks
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Internal Control and Accountants’ Roles
Accountants as
Evaluators – must understand internal control systems
to:
• Help develop management’s report that assesses
internal controls (as internal auditors)
• Prepare an attestation to management’s statement
about internal control (as external auditors)
• Conduct the audit of a company’s financial
statements (as external auditors)
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Framework for Studying Internal Control
• Components of internal control (the COCO
Report)
• Internal control objectives
• Risk assessment
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Framework for Studying Internal Control
The COSO Report:
• 5 interrelated components of internal control:
– Control environment
– Risk assessment
– Control activities
– Information and communication
– Monitoring
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Internal Control Components and Objectives
Internal control:
• Execution objectives –
2 execution objectives for the revenue cycle:
– Ensure proper delivery of goods and
services
– Ensure proper collection and handling of
cash
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Internal Control Components and Objectives
Internal control:
• Execution objectives –
2 execution objectives for the acquisition
cycle:
– Ensure proper receiving of goods and
services
– Ensure proper payment and handling of cash
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Internal Control Components and
Objectives
Internal control:
• Information system objectives – Focus on recording, updating, and
reporting accounting information
– Important for ensuring effective
execution of transactions
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Internal Control Components and
Objectives
Internal control:
• Asset protection objectives – Focus on safeguarding assets to
minimize risk of theft or loss of assets
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Internal Control Components and
Objectives
Internal control:
• Performance objectives –
– Focus on achieving favorable
performance of an organization, person,
department, product, or service
– Established to ensure effective
operations
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KEYTERMS
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Application controls
Control activities
Control environment
Execution risk
General controls
Information system risks
Input controls
KEYTERMS
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Internal controls
Performance reviews
Recording risks
Risk assessment
Segregation of duties
Update risks
Workflow controls