Controls

Question 1

SCRUM

Answer 1

1. Segregation of duties - I RACE
2. Custody of assets
3. Reconciliations/Review
4. Unused stationary
5. Management Review and Supervision - CREFT

Question 2

Segregation of duties

Answer 2

No employee should be in the position to commit and hide fraud THUS segregate functions: (I RACE)

• Initiation
• Recording
• Approval
• Custody of Assets
• Execution

Question 3

Custody of assets

• What are the risks?
• What are some controls over assets?

Answer 3

Risk of:

• Theft
• Damage
• Loss
• Misappropriation - use for wrong purpose

Controls over assets:

• Physical security: locked doors, CCTV
• Service asset regularly
• Physical access restricted
• Responsibility over assets
• Check assets regularly (e.g. count at end of day)

Question 4

Reconciliations/Review

Answer 4

Perform - reconcile [x] to [y]

Reconcile each of these aspects:
[Ask] – [Receive] –[Recorded in accounts]

E.g. Bank recon, stock count
*Segregate review and recon

Question 5

Unused stationary

Answer 5

Valuable as people can use to commit fraud.
Controls:
- Keep locked away
- One person has responsibility and issues out
- Sign out on a register
- Sequentially number and check

Question 6

Management Review and Supervision

Answer 6

Review over: (CREFT)
-	Customer complaints
-	Reconciliations
-	Exception reports *must write out what the error is 
o	Reasonability i.e. anything that doesn’t make sense
o	Attempted access and failure to access 
o	Different rates/prices used
o	Missing items in sequences
o	Duplicates
o	Exceed limits
o	Overrides
o	Outside normal hours
o	DR/CR balance 

• Financial results
• Trends (think ARPs)
  o Actual to budget
  o Month on month
  o Ratios

Question 7

Valid (5)

Answer 7

TEA2R
1. Think like a THIEF (common sense)
 Put 2/3 controls against

2. Exception reports
3. Access controls
4. Authorisation
    Where in the systems is authorisation crucial? (2 points) e.g. exceed certain limit
5. Reconciliation [falls under all VAC]

Question 8

Accurate (2)

Answer 8

1. Input controls
   - VILR FSS
2. Calculations - reperform – think p(excl vat) x q

Question 9

COMPLETE (3) – usually “checking controls”

Answer 9

1. Sequence check – missing and duplicates
   * Must pre-number
2. Complaints register
   - Customers
   - Whistleblowing
3. ARPs – “management to perform the following ARPs as part of their monthly review”