internal control: risk-based principles-based approach

Internal Control Principle-Based Approach : 

Internal Control Principle-Based Approach Birzeit Consulting MEEconomics and Management UK, Europe, Middle East

What is Internal Control : 

What is Internal Control IC is a process-effected by those charged with governance, management and other personnel-designed to provide reasonable assurance about the achievement of the entity’s objectives with regard to Reliability of financial reporting Effectiveness and efficiency of operations Compliance with applicable laws and regulations In 1992 The Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control – Integrated Framework to help businesses and other entities assess and enhance their internal control systems UK, Europe, Middle East

What is the Traditional Thought about Internal Control (IC) : 

What is the Traditional Thought about Internal Control (IC) Administrative IC system(s) Accounting IC system(s) Information Technology IC system(s) Hospitals IC system(s) University, colleges, schools IC system(s) etc….. UK, Europe, Middle East

Is There a Discipline for Internal Control (IC) : 

Is There a Discipline for Internal Control (IC) Internal Control has five components: 1. Control Environment: the overall tone of the organization 2. Risk Assessment: management’s identification of risk 3. Information and Communication Systems: a means of recording transactions and communicating responsibilities 4. Monitoring: assessment of internal control performance over time 5. Existing Control Activities: control policies and procedures Each of these components has several Principles Each Principle has several attributes UK, Europe, Middle East

Internal Control-Integrated Approach : 

Internal Control-Integrated Approach UK, Europe, Middle East

What Makes Us Different : 

What Makes Us Different UK, Europe, Middle East

What Makes Us Different (cont.) : 

What Makes Us Different (cont.) UK, Europe, Middle East

What Makes Us Different (cont.) : 

What Makes Us Different (cont.) Any entity must have strategies to achieve its ultimate goals and justifies its existence The valid presumption is that entity’s processes are objective oriented Each aspect of an entity’s strategy utilizes information produced by its information systems The entity exists in a dynamic environment (CHANGE) PEOPLE is who set and implement corporate strategy and internal controls. Internal control is the DNA of any entity UK, Europe, Middle East

What Makes Us Different (cont.) : 

What Makes Us Different (cont.) UK, Europe, Middle East Feedback Internal Control

What Makes Us Different (cont.) : 

What Makes Us Different (cont.) We assess, design, implement and audit internal control system(s) using a: Principle-based, and Risk-based, and Process-based approach We integrate the information theory and information technology in our approach It is a new mind set of how to approach internal control system(s) of ANY entity based on the COSO Internal control components, principles, attributes and literature UK, Europe, Middle East

Do We Need Internal Control System(s) : 

Do We Need Internal Control System(s) Absolutely yes and in EACH entity. Proper and adequate internal control system(s) are needed and a prerequisite for efficient and effective: Corporate governance Internal audit Decision making process(es) Risk management Marketing activities Reliable financial reporting Operations activities Compliance with rules and regulations UK, Europe, Middle East

Do We Need Internal Control System(s) (cont.) : 

Do We Need Internal Control System(s) (cont.) Access to capital markets Merger and acquisition Human resources polices and procedures Processes to fight fraud Management practices and innovation UK, Europe, Middle East

Do We Need to Audit Internal Control System(s) : 

Do We Need to Audit Internal Control System(s) Yes. We do need to audit (maintain) internal control system(s) because: People change. Environment ( internal and external) changes Change is continuous and entities exist in a dynamic not static environments UK, Europe, Middle East

Thank You : 

Thank You We thank you for your time and we will be glad to answer your questions You may contact us at our e-mail: info@bzconsult.com or our contact details listed at our website www.bzconsult.com UK, Europe, Middle East