ADMINISTRATIVE Development of the entity's objectives and strategies

PERSPECTIVES AUDITORS Action taken by the administration

INTERNOS
ABOUT CONTROL
INTERNAL AUDITORS Provide reasonable security of the
INDEPENDENTS objectives of the entity
LEGISLATORS AND They encompass all the goals and objectives of the
REGULATORS
entity
A
U
D
I
T Effectiveness and efficiency
O
Reliability
R OBJECTIVES OF
I BUSINESS Compliance

A Safeguard

D UNDERSTANDINGS MAIN
E CONTRIBUTIONS OF
Control environment, risk assessment,
AND MEANINGS COMPONENTS OF
L COSO control activities, information-
INTERNAL CONTROL
DIFFERENT communication and monitoring activities.

C FROM
O COSO Strategic, subsystems
N THE LEVELS organizational, processes
T ORGANIZATION operational
R
O
L

I
N
T Study the effects of the
WANDA WALLACE information and control issues
E in fraud detection.
R
PERSPECTIVE
N Analysis of the elements
ACADEMIC STEVEN J. ROOT
O focused on management.

Highlight the public interest in

DIMITRIS N. CHORAFAS
financial themes and values.
 Segregation by roles.
Segregation of duties
Segregation by levels
PRINCIPLES OF Self-control
INTERNAL CONTROL
From top to bottom Pressure exerted by upper management.

Cost less than benefit Generate value for the customer and add value to the partner

A It depends on the results it offers.

Effectiveness
U
Reliability Relationship between effectiveness and operation.
D
I Documentation CI information properly documented.
T
O
R
I
A

D Design Adjust the control criteria to the needs and characteristics.

E Implementation It consists of putting the accepted design into operation.

L
Improvement Continuous action stage to ensure the efficiency of the CI.
PROCESSES OF
INTERNAL CONTROL Evaluation
They determine the scope of the process and give them an assessment.
C Valuation
the tests performed.
O
Audit Review the financial statements and results of a process.
N
Carried out through inspection and surveillance activities
T Supervision
and control.
R
O
L

I
N
Main Administration General manager of the entire SCI.
T
E Issuers of criteria Independent and subjected to public processes.
R External consultants Information and advice in the implementation stage.
N ROLES Y
RESPONSIBILITIES Internal staff In the improvement of internal control.
O
Internal auditors
Evaluation and assessment of internal control (A.
Internal) and evaluation of the entire SCI (A. External).
External auditors
They monitor the functioning and sanction its failure.
Supervisory authorities
compliance.
 Committee of Sponsoring Organizations of
COSO control criteria the Treadway Commission.
A
U Integrated conceptual structure Fundamental knowledge of the
D organization.
STRUCTURE OF
I INTERNAL CONTROL
Environmental assessments
T Enterprise risk management
from the company (COSO).
O
R Unification of both the practices and
Assessment tools
I for the evaluation of its implementation.

D
E
L Performance objectives,
Effectiveness and efficiency of operations profitability and safeguarding of
resources.
C
O Accounting of financial information Public financial statements and
reliable.
N DEFINITION OF
T INTERNAL CONTROL
Regarding the applications to
Compliance with laws and regulations
R applicable those to which the entity is subject.
O
L It refers to assets that are not
Asset safeguard
property of the entity.

I
N
Control environment Provides discipline and structure.
T
E
R Risk assessment Establishment of objectives.
N
O COMPONENTS OF
Control activities Policies and procedures.
INTERNAL CONTROL

Information and communication Allows employees to fulfill

with their responsibilities.

Assess the performance quality of the system

Monitoring
in time.
 SUMMARY OF THE GUIDE TEXT 'INTERNAL CONTROL AUDIT'

In the topic of internal control, we can deduce very clear aspects, but when
Over the years, many meanings have been generated, which ultimately fulfill.
a single objective to enhance the process to be investigated effectively and efficiently
effectiveness. It will have five very important and fundamental components to provide

execution, which are: CONTROL ENVIRONMENT, EVALUATION OF

RISKS, CONTROL ACTIVITIES, INFORMATION–COMMUNICATION AND
MONITORING. It is important to consider these steps for achieving the
plans to be carried out as they seek to provide a solution to a problem
found.

There are two fundamental stakeholders that can be

administrative and financial accounting, where the latter is based on all
the legal part that ensures that the assets are consistent and in accordance with what is stated

the generated states, since those who carry out these internal controls are
people who have the knowledge to approach everything
related and watch over the safeguarding of the company's assets. Since the
administrative perspective, internal controls are based on compliance with
objectives of the processes that have been planned in the work plan, where
Investigate how it was done, when, and in what time, since all these schedules
they must be completed or reach a certain percentage of completion. For this, there exists
an analysis called COSO, which is presented in detail, classified as
professional and academic classes for internal control.

In order to carry this committee, it is to maintain documented control, with the

valuation and internal assessment proposed by an auditor, with the combination of
the objectives and understandings of internal control are clear to provide good
results with effectiveness and efficiency, reliability, compliance and safeguarding,
this depends on the level of the organization in which it is located to make things clear
objectives since the categories show the deficiencies that may arise in the
results of each intervention.
 Within everything that this process must encompass, there is something important.

administrative, financial, or any type of author who has the definitions

presents to expose, are the procedures that ensure that the assets
are properly protected, that the accounting records are reliable and that the
the entity's activity is carried out effectively according to the established guidelines
by the administration with the achievement of the objectives.

On the other hand, it is mentioned that for internal control to fulfill its
objectives must preserve resources and ensure the execution of the best
organizational decisions, outlining the measures to be taken into account for each
operation taking as reference the principles of internal control. Principles
established by the third generation of internal control, specified in 7
aspects, like this:

Segregation of duties: It indicates that no person should have control.

about a transaction from beginning to end. Currently, it is possible to
distinguish two important connotations: first, the segregation of the
functions related to internal control That is, the roles they play
administrative positions directly related to internal control this
includes administrators, executives, audit directors, support staff in the
internal control and auditors. The fundamental differentiation in functions and roles
in the pursuit of achieving shared objectives. Differentiate the functions of
internal control according to the organizational level, that is to say differentiate between controls

accounting and administrative is the second connotation of the segregation of

functions called 'by levels.'

Self-control: The best of all internal controls is that processes

sean performed by capable people supported by technology. Of course, the
evaluation and the audit of internal control must be external: The auditor
internal must be external to the administration, and the external auditor must be
external to the entire organization.

-From top-to-bottom: The integrated conceptual structure that offers

COSO refers to this principle as "tone from the top".
it means that transactions, events or risks, and contracts have to
to be authorized and executed by persons acting within the range of
authority and following due process giving rise to what in the
In current times, it is known as corporate governance.

Lower cost than benefit: This principle is based on the premise that the
internal control although it constitutes a cost is considerably lower than the
benefit, since internal control generates value for the customer and aggregation
Shareholder value should not be considered an expense.

-Effectiveness: Internal control depends on the results it is able to

to offer, that is to say that effectiveness directly depends on achieving the objectives
What the company has.

Reliability: It is the relationship that exists between the effectiveness of the design and

operation of the internal control system and the extent of the documentation,
awareness and monitoring of internal control.

Documentation: All information related to internal control of

to be properly documented, including the control criteria, the design
selected and the actions taken and by effect of the Sarbanes-Oxley Act of
2002 involves the conservation of the same.

In the case of roles and responsibilities to meet the objectives,

Apart from the principles, there must be an organization based on the
different activities to be considered in the internal control process; through
from a linear structure starting with the design, implementation, improvement,
evaluation, assessment, audit and supervision.

These activities are established and executed through the various

areas responsible for each of the processes. In this way, the management
the principal will be monitoring each one of the processes, supporting and collaborating

with other stakeholders such as the criteria providers, external consultants, the
internal personnel, internal/external auditors, and supervisory authorities.
 As previously mentioned, internal control is based on certain principles of
technical character, its main structure is conceptual and corresponds to a broad
understanding of internal control in terms of systems such as; Processes,
objectives, elements and relationships.

The fundamental principles of internal control are the analysis of different

Criteria and structures, allowing to indicate the following seven rules of control
internal.

1. Division of functions.

2. Self-control

3. From top to bottom

4. Efficiency

5. Cost lower than benefit

6. Accounting

7. Documentation

The division of functions related to internal control is a principle.

what is at the base and technically works with the form of weight and counterweight,
helping us to outline the fundamental differentiations in the
tasks and roles in the pursuit of shared objectives, understanding
The oldest in the division of functions is to point out that no person possesses the
control over a transaction from beginning to end. Likewise
no individual should be able to register in the highest-level organizations.
authorize and reconcile a transaction; the internal control process is those that
perform on their own or with qualified personnel supported by technology, of
it can be said that no internal control is able to function.
from the bottom up, because low-level staff cannot
to control the organization's executives, the effectiveness and this depends on the same
the achievements of the objectives set by this system.
 The lower cost than benefit implies that internal controls can be
more expensive than the activities that verify them, nor the benefits they provide. If
internal control generates an extra cost it is better to eliminate it from the process, for this

the documentation states that only the transactions must be clear and
completely documented and available for review. Regarding another
the subject is the company's documents, one of the most important documents
clarity applies to approaches based on the origin of the conceptual structure
for the internal control systems of the organizations mentioned in a
practical application.

The emphasis of the internal control design points to highlight the

criteria that this has as a common reference and with a high dose of
objectivity. Especially based on international standards. The actions
strategic decisions made by senior management in exercising an ownership role
internal control, this helps save large amounts of resources, within a deadline
Prudent, an accepted design can be implemented in this big step; the key is
the coherence and alignment between the selected judgment and the associated methodology
with the same; strategic management for the improvement of control
Internal is a stage to ensure the efficiency of achieving the objectives of the
organization.

Internal auditors evaluate or assess internal control to assist in

management of its organizational management activities, the audit entails
subject to examination, independent at the charge of the company's auditor, the
valuation that, based on a control criterion, passes into the hands of the
main administration for a supervision which at this stage is available for
the documentation mainly with the evaluation and a decision is made to
start implementing.

Internal control and value added help achieve the objectives of the
In this regard, COSO has many advantages over other criteria.
of control, the achievement of these organizational objectives requires ensuring
some security terms, helping us in the fight against fraud and the
corruption, there is a need for more suitable personnel at every moment, more systems
sophisticated ones that have better technology and are vulnerable if they are in
hands of people with few scruples.

QUESTIONS

What are the strengths and opportunities identified in the development of the
audits and internal control in organizations?

STRENGTHS

1. Risk-based audit plan with management validation

2. Processes for determining follow-ups
Definition of the vision, mission, values, and internal audit statute.
4. Defined and valid audit plan
5. Comparison of process approaches versus traditional.

OPPORTUNITY

Collaborate with other assurance and risk management functions.

2. Implement the risk and control self-assessment.
3. Contribute to new projects to include new controls.
4. Increase in the acquisition of skills, knowledge, and capabilities
personal.
5. Train the qualified personnel on the role of internal audit.

What are the weaknesses and threats?

DISABILITIES

Knowledge gap and its fraud.

2. The risk assessment is not linked to a strategy as such and
your identification is made limited.
3. The data is limited and is not used effectively.
4. Performance evaluation is only done once a year.
5. A defined model development is not implemented.
THREATS

Lack of knowledge in administrative groups.

Lack of cooperation from the management group.
3. Increase in emerging risks or changes in them.
4. Implement new findings themes due to budget issues
limited or personal.
5. Implementation of new approaches without having a balance that gives the
attention required to operational risks.

What are the most common concepts used in audits and control
internal?

Audit: it is a term that can refer to three different things

but linked to each other: it can refer to the work carried out by an auditor, to the task of
to study the economy of a company, or the office where these are carried out
tasks.

Strategy: it is the pattern of a series of actions that occur over time.

(Mintzberg, Quinn, & Voyer, 1997)

System: From the Latin systema, a system is an ordered module of elements.

that are interrelated and interact with each other. The concept is
it is used both to define a set of concepts and to real objects endowed
of organization.

Environment: a series of external conditions to the company, to which it

must respond. (Mintzberg, Quinn, & Voyer, 1997)

Quality certificate: a document that verifies the quality of a product

or service.
References
Unable to access the content of the provided URL.

Unable to access or translate external URLs.