How do you design and implement a system of internal control?
Question: How do you design and implement a system of internal control?
Answer: It should be a top-down, risk-based effort. However, for controls to be effective, they must adhere to certain design elements, including:
It is imperative that those executing control activities understand what the control is attempting to achieve.
The documentation should provide a foundation for appropriate communication concerning the responsibility for performing controls and for effective monitoring of control operations.
Monitoring compliance with a control is a key component in the overall design of the control.
A well designed control should produce evidence that can be subsequently accessed, demonstrating the outcome of the application of the control.
The quality of the design of a control is dependent on the degree to which it addresses the cause of the identified risks.
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