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11) |
What are internal controls?
Internal controls
are processes within a department or organization, which are
designed to provide reasonable assurance regarding the
achievement of the following objectives:
>The reliability and integrity of information.
>Compliance with policies, plans, procedures, laws, and
regulations.
>The safeguarding of assets.
>The economical and efficient use of resources.
>Effectiveness and efficiency of operations.
>Reliability of financial and operational reporting.
Internal controls help assure that operations are conducted
according to plan. They are tools used every day by
managers, from the unit levels to the Officeholders, Judges,
Executive Director’s, and Superintendent’s of the County,
which include written policies and procedures,
organizational design, and physical barriers.
Through careful design, internal controls can help your
department operate efficiently and effectively and provide a
reasonable level of assurance that the processes, services,
or products for which you are responsible are adequately
protected.
In short, a control is any action taken by the
administration/management to enhance the likelihood that
established objectives and goals will be achieved.
Implementation of internal controls is the prime
responsibility of County administrators and supervisors.
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12) |
What is managements
responsibility regarding internal controls?
Management is
responsible for ensuring that internal controls are
established and functioning to achieve the missions and
objectives of their department. Management must respond to
any changes that may cause the effectiveness of a control to
deteriorate by creating additional controls or altering
existing controls to protect against loss.
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13) |
Why is segregation of duties
important?
A lack of segregation of duties is a significant
contributing factor in almost all occurrences of fraud. When
duties are properly segregated the potential for loss or
inappropriate use of Summit County assets is minimized.
Supervisory review of work is always important, but it does
not replace the need for segregation of duties. Proper
segregation of duties will assure that the County's assets
are properly used and safeguarded.
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14) |
What are the Audit
Committee's responsibilities?
(a) To review the
effectiveness of the County’s financial and other internal
control systems
(b) To review the external auditor's report and the outcome
of its findings, and to have direct access to the external
auditor
(c) To review the scope and effectiveness of the internal
audit's work including planning and operation of the work
and results of internal audit's reports
(d) To satisfy itself that satisfactory arrangements are in
place in Summit County to promote economy, efficiency and
effectiveness
(e) To work with the State Auditor’s Office on the
appointment and remuneration
of the external auditor
(f) To advise Summit County Officeholders, Courts and
Agencies on risk management and the levels of accountability
for it
(g) To consider the draft audit reports for approval
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15) |
What is the difference
between an internal audit and the annual external audit?
External audit is a
statutory requirement which checks that the County’s
accounts present a true and fair view of the financial
position. The internal auditors report to the Audit
Committee on the control systems used within the County.
They should have a more detailed knowledge of systems than
is required for external audit. Sometimes, the differences
between the internal and external auditors can be confusing.
In Summit County, internal and external auditors have an
agreed understanding of how to work together and this is
detailed below. This approach includes:
>Regular meetings
>Sharing planning information
>Consulting each other on risk assessments
>Where appropriate, consulting on audit testing programs
>Sharing audit findings
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16) |
What is Audit Committee's
role with respect to its Internal Audit Department and the
external financial audit?
The County’s Audit Committee has a role in measuring our
effectiveness. This includes:
>Approving our plans;
>Approving our budget;
>The provision of internal audit resources;
>The appointment of the Director of Internal Audit;
>Approving audit reports
>Following up previous audit recommendations.
External audit’s report to the Audit Committee includes a
management letter and A-133 audit report of findings.
External audit may also attend the meetings of the Audit
Committee so that the Committee can take a broad view of
audit activity in the County
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17) |
Does Internal Audit
have any role producing the County's financial statements?
We have no statutory role in auditing financial
statements. External audit is required to give an opinion on
the County’s audited financial statements.
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18) |
What are the roles of
external audit and Internal audit regarding compliance with
laws and regulations?
Through our risk-based approach, we consider controls in
respect of legal requirements, as well as requirements by
other bodies and the County’s own rules and regulations.
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19) |
What information should the
County's government units provide to internal audit
regarding any new systems development?
We should be advised of all significant new systems
being developed and will select those which we wish to be
involved with in order to assist with a successful
implementation.
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20) |
What safeguards does
internal audit provide regarding fraud an how does external
audit utilize them?
Our work is designed and conducted to consider how well
the controls prevent and detect fraud. In addition, fraud is
considered as a routine risk when planning audit work. We
may also be involved in any specific fraud investigations.
External auditors consider our work in relation to fraud
when assessing the risk of material misstatement in the
financial statements.
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