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Boek ch2 by Mind Map: Boek ch2
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Boek ch2

importance of internal control

For a number of years the top management of Robert Maxwell’s Mirror group withdrew large sums of monet from two organizations and the company pension fund to save the organization.

On the so called Walrus project of the dutch Ministry of Defense , involving two sophisticated submarines, large budget overruns went unnoticed by the management of the dutch royal navy and the ministry of defense.

COSO report

control environemnt

culture with respect to the importance of internal control, integrity and ethical values, interpretation of the tasks o/t board of directors

Risk assessment

establishing such measures that the residual risk is reduced to an acceptable level, Problems can be avoided, problems cannot be avoided:, implementing internal control, do nothing

control activities

preventive and detective control measures

Information and communication

recording transactions

matching internal documents

communication of procedures


ongoing activities

seperate evaluations

Corporate governance

deals with


decision making





Cornerstone of internal control

steering paradigm

the controlled system (organization)

the control system (management)

the information system (the information received)

The environment

management cycle (People need to be managed to move them in the desired direction.)







An information system processes data to produce information.

Value cycle

segregation of duties, authorization, making decisions, Custody, safeguarding goods, money, Recording, recording sales, revenues in data collections, Checking, checks realization of plans, Execution, executes task by authorization

Reconciliation, relationship between offers and yields, to produce a certain product a particular quantity of raw materials, man hours and machine hours is required., relationship between positions and events, there is a relationship between the opening balance of a inventory and the ending balance

Classifications of internal control

Direct check

assigned to processes, procedures

indirect check

applied to outcomes of processes and procedures

formal check

correspondence between procedures and recording of information

material check

examining the correspondence between the inventory as recorded in the general ledger and the inventory present in the warehouse

negative check

establishes the completeness of a recording

positive check

establishes the validity of a record

policy control

Evaluates the quality of decisions regarding the long-term strategy

standards control

comparing with standards and norms

expectations control

the realism of expectations and prognoses that underlie policies.

authority control

prevent unauthorized officers from gaining access

progress control

Continuity of operational processes

efficiency control

evaluates the operation in terms of cost control and realization of objectives

execution control

verify whether delegated tasks are performed in accordance with the related task assignments.

custody control

prevent unauthorized physical access

programmed controls

edit check, forcing users to fill in everything

integrity controls

regarding information systems