Page 82 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
o authorising transactions,
o recording transactions, and
o maintaining custody of assets
to reduce the opportunities to allow any person to be in a position to both perpetrate and conceal
errors or fraud in the normal course of the person's duties.
• Performance Reviews: These control activities include.
o Actual vs Prior period, Budget, forecast.
o Operating Vs Financial
o Internal Vs External

Analyse & investigate relationship & Corrective Actions
• Information Processing:
o General IT Controls
o Application Controls

(CNO-MRI.440) Information System, Including the Related Business Processes, Relevant to Financial
Reporting, and Communication
Definition: Information system consist of:
• Infrastructure (physical and hardware components),
• software,
• people,
• procedures and
• data
Many information systems make extensive use of information technology (IT).
I. Reporting objectives of information system (same as Assertion)
Completeness:
• They should ensure that all valid transaction are identified & recorded.
Accuracy:
• Ensure that transaction are recorded & measured at proper monetary value.
Classification:
• Ensure that transaction are classified & ensure that sufficient detail is available regarding transaction so
that on timely basis they can be classified.
Cut-offs:
• Transaction should be recorded in correct accounting period.
Presentation & Disclosure:
• Ensure that transaction are properly presented in financial statements & adequate disclosure are given
in notes to accounts.
Effect:
• The quality of system-generated information affects management's ability to make appropriate decisions
in managing and controlling the entity's activities and to prepare reliable financial reports.
Role of proper communication:
To improve information system there should be proper communication regarding roles & responsibility
pertaining to information system.
• It can be in the form of policy manuals, financial reporting manuals (Communication can be made orally;
electronically or through actions of management)

(CNO-MRI.460) Monitoring of Controls
Definition: Process to assess effectiveness of Internal Control performance & taking remedial action.

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