Page 113 - Rižnar, Igor, and Klemen Kavčič (ed.). 2017. Connecting Higher Education Institutions with Small and Medium-Sized Enterprises. Koper: University of Primorska Press
P. 113
Internal Audit in the Financing of Companies
• Verification: transactions and significant events should be moni-
tored before and after the project.
• Harmonisation: the test results should be periodically reconciled
with the appropriate documents.
• Reviews of business success: they must be regularly reviewed accord-
ing to a set of standards by assessing their effectiveness and effi-
ciency. Based on this, we see whether they have all been imple-
mented as they should be.
• Reviews of operations, processes and activities: They must be period-
ically reviewed to ensure that they comply with the applicable reg-
ulations, policies, procedures or requirements.
• Surveillance (assessment, review, validation, guidance and train-
ing): Helps to ensure the proper achievement of the purposes of
internal control.
Control activities theory covers three groups, namely preventive, de-
tective and corrective control activities. Preventive controls are controls
designed to prevent or limit errors, omissions and unauthorised use
(Turk 2002, 548). Detecting control are checks designed to detect errors,
omissions and unauthorised use and reporting on that (p. 396). Correc-
tive controls are controls designed to help eliminate errors, omissions
and unauthorised use and to take immediate action (p. 474).
Among the mentioned control activities, the first three are preven-
tive, the following three are detective, and the last two have both pre-
ventative and detective roles. It is very important that the costs of the
control activities do not exceed the benefits that they bring (Internal
Control Standards Committee 2004, 8).
Assessment of Information and Communication
Since information comes from many different sources (internal and ex-
ternal) and in a variety of formats (qualitative and quantitative), the
biggest challenge for the management is to obtain data that is impor-
tant or useful (Committee of Sponsoring Organizations of the Tread-
way Commission 2004, 68).
Successful communication is carried out in all directions – upwards,
crosswise and down in the organisation and throughout all the compo-
nents of the entire structure. It is very important that communication
is implemented bidirectionally between the management and employ-
ees. It is also important that the management successfully communi-
111
• Verification: transactions and significant events should be moni-
tored before and after the project.
• Harmonisation: the test results should be periodically reconciled
with the appropriate documents.
• Reviews of business success: they must be regularly reviewed accord-
ing to a set of standards by assessing their effectiveness and effi-
ciency. Based on this, we see whether they have all been imple-
mented as they should be.
• Reviews of operations, processes and activities: They must be period-
ically reviewed to ensure that they comply with the applicable reg-
ulations, policies, procedures or requirements.
• Surveillance (assessment, review, validation, guidance and train-
ing): Helps to ensure the proper achievement of the purposes of
internal control.
Control activities theory covers three groups, namely preventive, de-
tective and corrective control activities. Preventive controls are controls
designed to prevent or limit errors, omissions and unauthorised use
(Turk 2002, 548). Detecting control are checks designed to detect errors,
omissions and unauthorised use and reporting on that (p. 396). Correc-
tive controls are controls designed to help eliminate errors, omissions
and unauthorised use and to take immediate action (p. 474).
Among the mentioned control activities, the first three are preven-
tive, the following three are detective, and the last two have both pre-
ventative and detective roles. It is very important that the costs of the
control activities do not exceed the benefits that they bring (Internal
Control Standards Committee 2004, 8).
Assessment of Information and Communication
Since information comes from many different sources (internal and ex-
ternal) and in a variety of formats (qualitative and quantitative), the
biggest challenge for the management is to obtain data that is impor-
tant or useful (Committee of Sponsoring Organizations of the Tread-
way Commission 2004, 68).
Successful communication is carried out in all directions – upwards,
crosswise and down in the organisation and throughout all the compo-
nents of the entire structure. It is very important that communication
is implemented bidirectionally between the management and employ-
ees. It is also important that the management successfully communi-
111
