Ensure that Your Business is Protected from Risks
Internal Controls are a set of policies and procedures that companies put into place to safeguard their operations while allowing employees to focus on the core business. While creating a framework for internal controls is the first step, putting the controls into practice is the best way to ensure that the business is protected from internal and external risks.
Steps for Creating an Effective Internal Control Framework
- Control environment: Nurture a culture that values a sound control environment with a top-down focus on integrity, a commitment to investigating discrepancies, as well as diligence in designing systems and assigning responsibilities.
- Risk Assessment: Identify the areas of greatest risk and focus the greatest amount of control in those areas.
- Monitor and Review: Management should schedule periodic reviews of the system of internal control to identify areas that may need to be updated or enhanced to meet current needs.
- Information and communication: Making information accessible and having a clear and evident plan for communicating responsibilities and expectations is the key to a good internal control system.
Texo Scenario: Systems Security
Security is one of the internal control activities that is not only the most reviewed but the most poorly implemented. For example, business’ today have numerous systems that require usernames and passwords for employee access. If an employee resigns or is terminated, each system needs to be reviewed to check that the user has been deleted or deactivated from the system.
Texo can model this process so that when a user is deactivated from the human resources systems, an event fires through each system that the employee had access to and deactivates their access. This provides the internal audit team with a security report confirming the systems the user had access to as well as the user’s removal from those systems.