Making It Happen
The approach to follow:
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Adopt and understand a recognized internal control framework.
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Engage the board, management, and other personnel in the ownership of internal control.
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Identify the mission critical business processes.
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Consider standardizing processes across the business.
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Document those processes, highlighting the key controls.
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Consider the effectiveness of the key controls and improve where necessary.
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Design tests to confirm satisfactory compliance with key controls, and take remedial action as required.
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In addition to control activities, consider whether the other essential components of an effective system of internal control are sound—for example, the control environment, information and communication, risk assessment and monitoring.
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Draw overall conclusions.
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Use the results from this process as a continuous improvement tool to improve the internal control system.
Notes
1 Other recognized internal control frameworks are the Canadian “CoCo” framework, and the United Kingdom’s Turnbull framework.
2 King Report on Corporate Governance for South Africa (March 2002), “King II,” Institute of Directors in Southern Africa. “King III” is to be published in 2009.
3 For instance, incoming cash should be controlled at the point and time of entry into the business.
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