Module 6 - Key Controls

To add a new control, click on Add, to edit an existing control, select the control and click on Edit. Adding or editing a control is carried out through the following dialog.  Please note the drop downs for designed effectively and implemented.

 

Enter the details of the control and select at least one financial statement area and assertion. The other areas of the dialog are used as follows:

Comment on the details and design of the control: It is a requirement that you consider the key controls, their design and effectiveness for all audits. If it is then decided that a controls based approach is to be taken, procedures then need to be designed to test the control.

Comment on implementation of control: As with the design and efficiency, it is required that the implementation of controls be confirmed for all audits.

Financial statement area/assertions: You may associate the risk with any number of financial statement areas/assertion combinations. Use the Add and Delete buttons to complete this area.

Key control: This checkbox will be ticked by default and indicates that the control is considered a key control. If the control is not key, the tick may be removed. This will generally be set as you would normally only record key controls in the database. However, it is provided to cover the situation where you wish to record all controls and mark the ones that are considered key.

IT Control: This check box needs to be ticked if appropriate 

Plan to test operating Effectiveness: For a controls based audit, this checkbox allows you to indicate if the control is to be tested during the current audit. When ticked, the Work Programme button becomes active allowing you to design the procedures to be carried out in respect of the control.

If you indicate that a control is not to be tested in the current year and you have planned  procedures in respect of the control, the system does not remove the list of procedures to be carried out but simply inactivates them. This means that if, later in the audit, or in a following year, you indicate that the control is to be tested, the previously defined procedures will be restored and can then be reviewed and edited as required.

Last tested: This field shows the period end in which the control was last tested. Initially this will be blank, however it can be updated manually to allow you to record the period end it was last tested. When you balance forward, the system will update the field for all controls that were tested in the year.

Work programme: You may design the audit procedures in respect of the control at any time. This can be done from this dialog by clicking on the Work programme button, or you can do this at the same time as designing your work in respect of assessed risks via the Audit area risk dialog.

Balance forward: On a balance forward, the system will update the Last Tested field for all tests where further tests were carried out in the year and clear all further test flags, inactivating any planned procedures in respect of the controls. After updating the control details, you can then decide which controls are to be tested in the following year’s audit. If you select any where procedures have been defined in prior years, the procedures will be restored and can then be reviewed and edited as required.

A Key control button is also available on following dialogs:

• Key process form
• Key business processes 
• Perennial CL questions 
• Background information
• Identified audit risk

As with identified risks, adding a control via one of these dialogs links the control to the source. If no controls have been linked, the button text is shown in black, if there are linked controls it is shown in green.

When you click on the Key control button, the system displays the list of key controls, only displaying the controls associated with the source. You may add a new control using the Add button, or you can display the full list of controls and link the source to an existing control that has been entered from elsewhere.