Risk assessment checklist - Accounting and reporting

1 Risk assessment checklist - Accounting and reportingRisk assessment tools for effective internal controls - a Compliance and Best Practices Guide from First Reference Inc. 2008-2010 First Reference Inc. All Rights 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 ( , See FN ) 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 and reporting risks to considerYe sNoN/AComments / Action RequiredAcc1Do you ensure that personnel responsible for Accounting and reporting functions are com-petent, adequately trained and supervised?

2 See OP ; GV you have procedures to ensure that timely and accurate information needed by manage-ment and others to discharge their responsi-bility is communicated to them? See FN , , , those with oversight responsibilities ( , the audit committee) regularly review finan-cial statements and approve the selection of Accounting policies used? See GV , , procedures exist to ensure the financial statement impacts from new contracts and agreements are identified and addressed ( , financial instruments, capital leases, etc.)? See FN , , , , ; GV an up-to-date financial statement disclosure checklist used for determining the complete-ness of disclosures? See FN , you perform a detailed comparison of actual versus budgeted disbursements? See FN , senior management and/or the audit committee review the financial statements prior to release?

3 See GV , management or supervisory personnel responsible for preparation of external finan-cial reports periodically review significant contractual agreements involving third-party suppliers? See GV ; FN you periodically establish operating stan-dards, such as quarterly or annual budgets? See GV assessment checklist - Accounting and reportingRisk assessment tools for effective internal controls - a Compliance and Best Practices Guide from First Reference Inc. 2008-2010 First Reference Inc. All Rights and reporting risks to considerYe sNoN/AComments / Action RequiredAcc10Do you specify information needed to identify and explain budget variances, trends or un-usual changes? Does your information system support the communication of this informa-tion?

4 See FN ; GV you systematically identify user informa-tion needs and update this information peri-odically? Do you communicate information needs from users to the preparers of financial reports? See FN 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 and IT, Chapter 1 Acc13 When system weaknesses are identified, does management take remedial action promptly? See FN ; GV , , you determine dates and relative priorities for all management reports, whether routine or non-routine? See FN you communicate management report due dates and priorities to report preparers and users?

5 See FN financial statements reviewed for accu-racy, classification of accounts, consistency of Accounting policy application, cross-referenc-ing and completeness by someone other than the preparer? See FN , , , your system generate a report compar-ing results for the period with the prior and budgeted periods? Does management regu-larly (at least monthly) review the report and investigate variances? See FN ; GV you require that each subsidiary submit reporting packages containing comprehensive financial information on a timely basis? See FN , , , ; GV assessment checklist - Accounting and reportingRisk assessment tools for effective internal controls - a Compliance and Best Practices Guide from First Reference Inc. 2008-2010 First Reference Inc.

6 All Rights and reporting risks to considerYe sNoN/AComments / Action RequiredAcc19 Are subsidiaries audited financial statements reconciled to the financial statements submit-ted to the parent? See FN , , your system generate a balance sheet and income statements for each legal entity? See FN 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 , ; GV management regularly compare actual purchases (costs and expenses) to budgeted purchases and investigate and document vari-ances? See FN , , management regularly review an analy-sis of gross profit ratios and investigate and document variances? See FN , , management (at least monthly) compare actual cash disbursements with cash flow bud-gets, and document reasons for variances?

7 See FN , , management regularly (at least month-ly) review an aged accounts payable listing reconciled to general ledger and follow up on exceptions? See FN , management regularly (at least monthly) review an aged report of open orders and in-vestigate old/unusual items? See FN , all finance and other staff aware of the need to maintain the confidentiality of finan-cial information? See FN you restrict report or information distribu-tion to authorized personnel and periodically review and update distribution lists? See FN ; GV you reconcile books and records to ensure their internal consistency? See FN you ensure that transactions are recorded in the correct Accounting period? See FN assessment checklist - Accounting and reportingRisk assessment tools for effective internal controls - a Compliance and Best Practices Guide from First Reference Inc.

8 2008-2010 First Reference Inc. All Rights and reporting risks to considerYe sNoN/AComments / Action RequiredAcc31 Are period-end journal entries categorized by type (standard, recurring and non-routine) and then reviewed for completeness and inclu-sion in the correct Accounting period? See FN all journal entries require supporting documentation? Do all non-routine entries receive documented approval prior to being posted? See FN the mapping of trial balance accounts to financial statement groupings automatic? Is it documented and checked periodically by management? See FN you resolve differences between the ac-counts receivable subsidiary ledger and the accounts receivable control account? See FN a reconciliation of exchange translation gains or losses prepared and reviewed by man-agement?

9 See FN controls exist over changing the foreign exchange rate in the Accounting system? See FN , consolidation schedules, spreadsheets and calculations reviewed by someone other than the preparer? See FN , inter-company reconciliations prepared each month? Are differences resolved on a timely basis? See FN , consolidation and elimination entries ap-proved by management? See FN , your system generate a report showing inter-company accounts that do not agree? See FN cash journals reconciled to general ledger control accounts on a timely/regular basis? See FN procedures exist to ensure receipts are recorded in the correct period? See FN assessment checklist - Accounting and reportingRisk assessment tools for effective internal controls - a Compliance and Best Practices Guide from First Reference Inc.

10 2008-2010 First Reference Inc. All Rights and reporting risks to considerYe sNoN/AComments / Action RequiredAcc43Do period-end procedures exist to detect and account for unprocessed receiving reports? See FN , the purchases journal balanced regularly? Does it agreed with general ledger control ac-counts? See FN a reconciliation of the accounts payable sub-ledger and the general journal prepared monthly and approved by management? See FN procedures exist to ensure payments are recorded in the correct period? See FN management review and approve peri-od-end accruals? See FN financial models used in preparing assess-ments and estimates tested and reviewed by management? See FN , the information, assumptions and calcula-tions used for fair market value assessments and estimates fully documented?