||July 27, 2020
KnowledgeLeader's Top 10 Pages: April—June, 2020
These were the top 10 most frequently accessed content pages on KnowledgeLeader during the second quarter of 2020:
|1. Entity-Level Controls Risk Assessment Questionnaire|
Risk assessment is the component of the entity’s internal control that involves identifying and analyzing risks internally and externally. Risk assessment is relevant to achieving business objectives as well as objectives related to the preparation of reliable financial statements.
This questionnaire template provides a number of COSO elements and the related objectives for entity-level controls. Within the questionnaire, you can document the control's COSO attribute, whether the control exists, whether it was designed properly, related test procedures, management's action plan for deficiencies, and more.
|2. Accounts Payable RCM|
An RCM provides an overview of different control objectives that organizations should take into consideration and the corresponding controls to safeguard the company against risks which may arise if not checked timely. Once customized to an organization, this document can help the user in assessing each control.
This document outlines risks and controls common to 5.2.1 Process Accounts Payable in a risk control matrix (RCM) format.
|3. AR and Cash Application Process Flow|
Cash application is a process relating to accounts receivable (AR), where incoming payments are applied to the corresponding customer invoice. Whether it is a cash or wire (EFT) payment, a monthly bank reconciliation is performed by the accounts payable (AP) assistant and the AR assistant within two days of month-end. It is then reviewed, signed off and filed by the financial controller.
This document can be used as a general guide to understand and review the AR and cash application process.
|4. Enterprise Risk Management Questionnaire|
The ultimate goal of enterprise risk management is to evaluate total returns relative to total risks, leading to more informed business decisions. Many ask questions about its value proposition. This questionnaire can be used when analyzing an organization’s enterprise risk management strategy. It focuses on the internal environment, objective setting, risk identification, risk assessment, risk response, control activities, information and communication, role of the board of directors, role of management, common risk failures, and trading activity.
|5. Risk Assessment Guide|
Every organization faces various risks from external and internal sources that must be assessed. ‘‘Risk assessment’’ is defined as the identification and analysis of relevant risk to achieve objectives, forming a basis for determining how the risk should be managed (accept, reject, share, reduce). To mitigate risks, organizations must set objectives; integrate with sales; and perform production, marketing, financial and other activities to ensure that everything is operating correctly.
This document can be used as a guide for understanding and improving an organization’s risk assessment process.
|6. Accounts Receivable Aging and Collections Process Flow|
Accounts receivable (AR) aging report lists unpaid customer invoices, a primary tool used by collections staff to determine which invoices are overdue for payment. The AR collection process is used to evaluate how long customers take to pay their invoices.
This process flow outlines the AR aging and collection process. It outlines steps such as:
- Reviewing balances aged over 30, 60 and 90 days
- Coordinating payment status with the claims company
- Coordinating payments with customers
- Writing off appropriate accounts
|7. Internal Audit Performance Measures Key Performance Indicators (KPIs)|
An effective business process is built on a set of well-defined and clearly stated business objectives. To build and continually improve an effective business process, a company establishes: key objectives to articulate the performance results they expect from the business process, outcome measures to determine whether they have reached the key objectives, and activity measures to monitor the performance of instrumental activities.
This tool outlines key objectives for conducting internal audits, the outcome measures associated with each objective, and the activity measures that drive each outcome measure.
|8. Inventory Policy|
This tool contains two sample policies that outline guidelines and accounting policies to ensure that inventory is properly controlled and valued and that losses or shortages are prevented. It applies to all inventory items, including raw materials/parts, work-in-progress, and finished goods and consigned inventory. The procedures focus on inventory valuation, slow-moving and excess inventory/reserves, reconciliation of perpetual inventory, physical inventory, consigned inventory, scrap, intercompany transfers, and capitalized costs.
The valuation method for each item of inventory shall remain consistent from one accounting period to the next accounting period.
|9. Inventory Audit Work Program|
This document outlines three sample work programs that provide general steps organizations can use during an inventory audit.
Sample steps in these work programs include reviewing the most recent prior audit report and relevant press releases, obtaining the completed inventory internal controls questionnaire from the plant controller, documenting any potential control weaknesses or unusual practices and investigate upon arrival, obtaining and documenting explanations from the controller for all open work orders older than two months, and ensuring that a cross-training program exists for all warehouse personnel.
|10. Procurement Internal Controls Audit Work Program|
This sample audit work program reviews the internal controls in an organization’s procurement process.
Sample questions to consider include: Are purchase orders based on authorized requisitions? Are purchase orders properly coded to identify the cost objective (direct, indirect or inventory)? Are purchase orders serially controlled and accounted for? Is the use of standardized purchase orders required? Are effective numerical document controls or status reports maintained to record the receipt of purchase requisitions? Does the purchasing department maintain specifications for all materials and services used by the contractor? Are requirements combined where appropriate?