TR 07- FI- 02

INTERNAL CONTROL

Basic

Course

-

MONITORING

build in from the start

January 2010

EU Twinning Project TR 07-FI-02

TR 07- FI- 02

COSO MONITORING MODEL

ESTABLISH A tone at the top

FOUNDATION organisational structure

baseline understanding of IC effectiveness

DESIGN & prioritise tasks

EXECUTE identify controls

identify persuasive information on controls

implement monitoring procedures

ASSESS & prioritise findings

REPORT report results to the appropriate level

follow up on corrective action

SUPPORTED CONCLUSIONS RE- CONTROL EFFECTIVENESS

TR 07- FI- 02

ESTABLISH A FOUNDATION

TONE AT THE TOP * communicate expectations

* take action when control problems identified

STRUCTURE * identify who does what at what level:

& * monitors risk (who ‘owns’ the risk?)

ROLES * oversees quality & reliability

* oversees audit activities

with Competence and Objectivity

BASELINE * understand ic system design

UNDERSTANDING * implemented fully?

OF IC EFFECTIVENESS * identify changes ~ risk assessment (external environment, control

operation)

* manage change – establish new baseline

* control revalidation/update – for continuous baseline assurance

TR 07- FI- 02

DESIGN & EXECUTE

4 Develop & implement 1 Understand & prioritise

cost-effective procedures risks to organisational

to evaluate the objectives

evidenced information

3 Identify reliable information 2 Identify key controls across

that will indicate whether the the internal control system

internal control system is that address those

operating effectively prioritised risks

TR 07- FI- 02

EVIDENCED INFORMATION

Evidenced information:

* Relevant

* Reliable

* Timely

* Sufficient

TR 07- FI- 02

IMPLEMENTING MONITORING DECISIONS

* Integrate with operations

* Provide objective assessments

* Use knowledgeable personnel

* Consider feedback

* Adjust scope & frequency

TR 07- FI- 02

ASSESS & REPORT RESULTS

Findings: to individual who owns the process & related controlsto (at least) 1 management level above

Deficiencies: report significant to top management

Corrections: timely actionsinternal & external sources

PRIORITISE AND COMMUNICATE:

Risk of achievement of objective(s)

Effectiveness of compensatory controls

Aggregate effect of multiple deficiencies

TR 07- FI- 02

ASSESS & REPORT RESULTS

QUESTIONS:

How can the right people receive the right information?

How can management provide sufficient oversight to gain

assurance corrective actions have been taken?

TR 07- FI- 02

INTERNAL CONTROL & INTERNAL AUDIT

Support Management: a helpful not combatitive service

Planned System Reviews: including those related to FMC

e.g. activity reports, assurance declarations

Plan & Implement Sampling: throughout the year

Regular unrestricted Reporting: all relevant levels of management,

incl. Top Managers

Source of advice & help: to all internally

TR 07- FI- 02

SDUs/CHU & INTERNAL CONTROLat organisational & national levels respectively

Coordinate: standards & appropriate practices

implementation

guidance

training needs & delivery

Communicate: standards & appropriate practices

implementation

guidance

training needs & delivery

Monitor: standards & appropriate practices

implementation

guidance

training needs & delivery

TR 07- FI- 02

GROUP SESSION 8 monitoring

1 introduce & organise yourselves

2 address the questions in the outline

FOCUS YOUR THOUGHTS & RESPONSES ON:

THE MONITORING MODEL & SDUs/CHU, INFO &

COMMUNICATION

& THE OTHER SESSIONS

ANY QUESTIONS?