Risk assessment checklist - Accounting and reporting

Transcription

1 Check Yes or No or N/A (where not applicable). Where a No is indicated, some action may be required to rectify the situation. Cross-references (e.g., See FN 1.01) point to the relevant policy in the First Reference Internal Control Library. FN = Finance & Accounting PolicyPro, Volume 1; GV = Finance & Accounting Policy- Pro, Volume 2; OP = OMPP policies in FAPP electronic version; IT = Information Technology PolicyPro; NP = Not-for-Profit PolicyPro. Acc1 Acc2 Acc3 Acc4 Acc5 Acc6 Acc7 Acc8 Acc9 Do you ensure that personnel responsible for accounting and reporting functions are competent, adequately trained and supervised? See OP 4.06; GV 6.02 Do you have procedures to ensure that timely and accurate information needed by management and others to discharge their responsibility is communicated to them? See FN 7.01, 7.02, 7.03, 7.05 Do those with oversight responsibilities (e.g., the audit committee) regularly review financial statements and approve the selection of accounting policies used? See GV 1.03, 1.07, 1.09 Do procedures exist to ensure the financial statement impacts from new contracts and agreements are identified and addressed (i.e., financial instruments, capital leases, etc.)? See FN 7.01, 7.02, 7.03, 7.04, 7.05; GV 2.03 Is an up-to-date financial statement disclosure checklist used for determining the completeness of disclosures? See FN 7.01, 7.03 Do you perform a detailed comparison of actual versus budgeted disbursements? See FN 7.01, 7.02 Does senior management and/or the audit committee review the financial statements prior to release? See GV 1.03, 1.07 Does management or supervisory personnel responsible for preparation of external financial reports periodically review significant contractual agreements involving third-party suppliers? See GV 4.02; FN 2.08 Do you periodically establish operating standards, such as quarterly or annual budgets? See GV First Reference Inc. All Rights Reserved. 1

2 Acc10 Acc11 Acc12 Acc13 Acc14 Acc15 Acc16 Acc17 Acc18 Do you specify information needed to identify and explain budget variances, trends or unusual changes? Does your information system support the communication of this information? See FN 7.02; GV 2.03 Do you systematically identify user information needs and update this information periodically? Do you communicate information needs from users to the preparers of financial reports? See FN 7.02 Do you periodically and systematically review the capabilities of your information system and identify information that it is incapable of generating? Are these deficiencies added to your IT strategic and tactical plans? See FN 7.02 and IT, Chapter 1 When system weaknesses are identified, does management take remedial action promptly? See FN 7.04; GV 6.01, 6.02, 6.03 Do you determine dates and relative priorities for all management reports, whether routine or non-routine? See FN 7.02 Do you communicate management report due dates and priorities to report preparers and users? See FN 7.02 Are financial statements reviewed for accuracy, classification of accounts, consistency of accounting policy application, cross-referencing and completeness by someone other than the preparer? See FN 7.02, 7.03, 7.04, 7.05 Does your system generate a report comparing results for the period with the prior and budgeted periods? Does management regularly (at least monthly) review the report and investigate variances? See FN 7.02; GV 2.03 Do you require that each subsidiary submit reporting packages containing comprehensive financial information on a timely basis? See FN 7.02, 7.03, 7.04, 7.05; GV First Reference Inc. All Rights Reserved. 2

3 Acc19 Acc20 Acc21 Acc22 Acc23 Acc24 Acc25 Acc26 Acc27 Acc28 Acc29 Acc30 Are subsidiaries audited financial statements reconciled to the financial statements submitted to the parent? See FN 7.02, 7.04, 7.05 Does your system generate a balance sheet and income statements for each legal entity? See FN 7.02 Do you produce a regular (at least monthly) comparison of actual cash receipts with cash flow budgets? Does management investigate variances and document findings? See FN 7.02, 7.05; GV 2.03 Does management regularly compare actual purchases (costs and expenses) to budgeted purchases and investigate and document variances? See FN 7.02, 7.05, 2.14 Does management regularly review an analysis of gross profit ratios and investigate and document variances? See FN 7.02, 7.05, 2.14 Does management (at least monthly) compare actual cash disbursements with cash flow budgets, and document reasons for variances? See FN 7.02, 7.05, 2.14 Does management regularly (at least monthly) review an aged accounts payable listing reconciled to general ledger and follow up on exceptions? See FN 7.05, 2.14 Does management regularly (at least monthly) review an aged report of open orders and investigate old/unusual items? See FN 7.05, 2.14 Are all finance and other staff aware of the need to maintain the confidentiality of financial information? See FN 7.03 Do you restrict report or information distribution to authorized personnel and periodically review and update distribution lists? See FN 7.03; GV 1.11 Do you reconcile books and records to ensure their internal consistency? See FN 7.05 Do you ensure that transactions are recorded in the correct accounting period? See FN First Reference Inc. All Rights Reserved. 3

4 Acc31 Acc32 Acc33 Acc34 Acc35 Acc36 Acc37 Acc38 Acc39 Acc40 Acc41 Acc42 Are period-end journal entries categorized by type (standard, recurring and non-routine) and then reviewed for completeness and inclusion in the correct accounting period? See FN 7.05 Do all journal entries require supporting documentation? Do all non-routine entries receive documented approval prior to being posted? See FN 7.05 Is the mapping of trial balance accounts to financial statement groupings automatic? Is it documented and checked periodically by management? See FN 7.05 Do you resolve differences between the accounts receivable subsidiary ledger and the accounts receivable control account? See FN 7.05 Is a reconciliation of exchange translation gains or losses prepared and reviewed by management? See FN 7.05 Do controls exist over changing the foreign exchange rate in the accounting system? See FN 7.05, 5.08 Are consolidation schedules, spreadsheets and calculations reviewed by someone other than the preparer? See FN 7.05, 7.06 Are inter-company reconciliations prepared each month? Are differences resolved on a timely basis? See FN 7.05, 7.06 Are consolidation and elimination entries approved by management? See FN 7.05, 7.06 Does your system generate a report showing inter-company accounts that do not agree? See FN 7.05 Are cash journals reconciled to general ledger control accounts on a timely/regular basis? See FN 7.05 Do procedures exist to ensure receipts are recorded in the correct period? See FN First Reference Inc. All Rights Reserved. 4

5 Acc43 Acc44 Acc45 Acc46 Acc47 Acc48 Acc49 Acc50 Acc51 Acc52 Acc53 Acc54 Do period-end procedures exist to detect and account for unprocessed receiving reports? See FN 7.05, 2.10 Is the purchases journal balanced regularly? Does it agreed with general ledger control accounts? See FN 7.05 Is a reconciliation of the accounts payable sub-ledger and the general journal prepared monthly and approved by management? See FN 7.05 Do procedures exist to ensure payments are recorded in the correct period? See FN 7.05 Does management review and approve period-end accruals? See FN 7.05 Are financial models used in preparing assessments and estimates tested and reviewed by management? See FN 7.06, 5.10 Are the information, assumptions and calculations used for fair market value assessments and estimates fully documented? See FN 7.06, 5.10 Are fair market value assessments and estimate calculations reviewed for accuracy and objectivity by someone other than the preparer? See FN 7.06, 5.10 Where spreadsheets are used in financial statement preparation, are key calculation cells locked, control totals used and the logic and calculations periodically checked to ensure accuracy of results? See FN 7.06 Does accounting software used contain application controls that prevent or detect an error from occurring? Does accounting software used automatically translate subsidiary balances into the parent's reporting currency? Are accrual calculations and provisions (including income taxes) reviewed for accuracy and lack of bias by someone other than the preparer?, 7.05, First Reference Inc. All Rights Reserved. 5

6 Acc55 Acc56 Acc57 Acc58 Acc59 Acc60 Acc61 Acc62 Acc63 Acc64 Does senior management or staff monitor accounting and tax requirements, assess the potential impact on the entity and take appropriate action (e.g., updating financial statement preparation and disclosure checklists)? Do you accurately process, prepare and file required tax documents on a timely basis? See FN 7.07 Do you reduce tax liabilities to the legal minimum? Do you record the effect of all tax transactions or economic events completely and accurately? Do you employ competent tax professionals either in-house or outside the entity to identify and prepare filings? Do you ensure that tax professionals are fully informed of all aspects of the entity s operations, including routine and non-routine transactions, and any changes in the entity s business lines or methods of conducting business? Do you have a system such as a tickler file to identify tax filing due dates? Do you identify information necessary to prepare tax documentation and ensure information systems are designed to accurately provide such information on a timely basis? Do you periodically review tax filings and status to specifically identify tax-savings opportunities? Are journal entries related to taxes approved by authorized and knowledgeable officials? See FN First Reference Inc. All Rights Reserved. 6