Organization of the Internal Reliability System

‭ RGANIZATION OF THE INTERNAL RELIABILITY SYSTEM; GENERAL‬ O ‭INTRODUCTION‬ I‭nternal control has an important perspective with regard to the reliability of the‬ ‭information and the measures aimed at it. From an audit perspective, this involves‬ ‭three distinct elements:‬ ‭-‬ ‭The quantity to be checked; The quantity‬ ‭-‬ ‭that serves as a control measure; The‬ ‭-‬ ‭actual testing.‬ ‭ he effectiveness of the reliability measures is determined by the necessary measures of an‬ T ‭organizational nature and by the necessary specific control measures. Important measures‬ ‭of an organizational nature are the control-technical separation of functions. A distinction is‬ ‭made between the decision-making, custodial, recording, executive and controlling functions.‬ ‭ hen setting up control measures, a number of control concepts are used, such as direct‬ W ‭and indirect control, formal and material control, positive and negative control, detailed‬ ‭control, total control, sampling and correlation control.‬ ‭ he set of internal control measures has its limitations based on economic‬ T ‭grounds, whereby the risk to be accepted from business operations is the‬ ‭opposite of the economic considerations.‬ ‭ ontrol, general understanding‬ C ‭In general it can be said that goal of internal control is the timely detection and‬ ‭c orrection of imperfections in the performance of business activities, as well as‬ ‭c reating the opportunity to take new measures if necessary in order to prevent the‬ ‭identified imperfections from occurring again in the future (for control, see also‬ ‭the KAD model discussed earlier).‬ ‭ echnically, we understand the term „inspection‟ to form an opinion about an object or‬ T ‭subject by means of testing against a standard. Every inspection therefore has to do‬ ‭with three elements, namely:‬ ‭-‬ ‭The quantity to be checked (‬‭IST position‬‭) ; The‬ ‭-‬ ‭quantity that serves as a control measure (‬‭SOLL‬ ‭-‬ ‭position‬‭) ; The actual test:‬ ‭ echnically, the actual control is carried out by notice whether the IST position‬ T ‭differs from the SOLL position. If a deviation is found, this deviation must‬ ‭subsequently be corrected spotted–here in the sense of warn–and in those‬ ‭c ases where the deviation is greater than that stated tolerance.‬ ‭ ith regard to compiling overviews in which the confrontation between reality and‬ W ‭norms is made visible, it is sometimes sufficient to report according to the so-called‬ ‭principle of exception‬‭. Only those items are included in the overview where the‬ ‭deviation exceeds the set tolerance limit.‬ ‭ eliability of the accountability and importance of the person responsible‬ R ‭Although this chapter concerns the measures of internal control relating to‬ ‭information provided in general‬‭, this section pays extra attention to the reliability of‬ ‭accountability.‬ ‭ he reliability of accounts can be divided into two aspects, namely: accuracy and‬ T ‭c ompleteness. One often sees a third in the literature, viz‬‭timeliness‬‭. This aspect‬ ‭should not be mentioned separately because it is part of the accuracy and‬ ‭c ompleteness.‬ ‭ esting an accountability report against that of an official with a conflicting interest‬ T ‭resembles a test of one report as the IST position against another report as the SOLL‬ ‭position. However, it is less straightforward than presented. In general, in view of the‬ ‭legitimate interests of those responsible for accounting, the receiving party's report can‬ ‭be regarded as the SOLL position as regards the‬‭c orrectness‬‭Re. What the‬‭integrality‬‭In‬ ‭this regard, the report of the issuing party can be used as the SOLL position.‬ ‭The system of internal control measures‬ I‭t has already been discussed above that the effectiveness of internal control is‬ ‭increased by taking certain organizational measures, such as introducing and using‬ ‭separations of functions. These and similar measures form such an integral part of‬ ‭internal control that it can be said that internal control can only fulfill its purpose if:‬ -‭‬ ‭And the necessary on measures‬‭of an organizational nature are‬‭taken;‬ ‭-‬ ‭And the necessary specific‬‭c ontrol actions are‬‭performed.‬ ‭Prescribing the performance of specific control actions can also be regarded as a‬ ‭measure in the context of internal control.‬ ‭ hese measures together form a system in which the elements must be dosed as‬ T ‭efficiently as possible. This system is normally referred to as the system‬ ‭of internal‬ ‭c ontrol measures‬‭indicated.‬ ‭Separations of duties‬ I‭n‬‭the‬‭c ase‬‭of‬‭technical‬‭separation‬‭of‬‭duties,‬‭to‬‭the‬‭extent‬‭economically‬‭feasible,‬ ‭the‬ ‭tasks‬ ‭are‬ ‭divided‬ ‭in‬ ‭such‬ ‭a‬ ‭way‬ ‭and‬‭the‬‭powers‬‭of‬‭the‬‭various‬‭officials‬‭are‬ ‭limited in such a way that:‬ ‭a)‬‭Each of them only one limited‬‭number of links of‬‭the entire circulation process;‬ ‭b)‬ ‭D ecisions to the‬‭have‬‭matters can only be taken by persons who are not themselves‬ ‭involved in the storage of those things are taxed;‬ ‭c )‬ ‭Persons who:‬‭executors are‬‭r esponsible for the efficiency of certain technical‬ ‭or commercial conversion processes, are not also responsible for a relatively‬ ‭long process‬‭storage‬‭of the goods or funds to be used or acquired;‬ ‭d)‬ ‭Opportunities are created to obtain mutually auditing accountability‬ ‭reports from persons with non-identical‬‭and, if possible, opposing‬ ‭interests‬‭;‬ ‭e )‬‭None of the officials involved in b) or c) participate in any part of the registration that‬ ‭c ritical‬ ‭with regard to the control to be exercised over his or her activity;‬ ‭f)‬ ‭With regard to those parts of the administration that practically also have a custodial‬ ‭nature, the check is placed in the hands of someone other than the person who‬ ‭maintains that part of the administration.‬ I‭n terms of control, the following five functions can be distinguished:‬ ‭-‬ ‭Possess;‬ ‭-‬ ‭To carry out;‬ ‭-‬ ‭Save;‬ ‭-‬ ‭Register;‬ ‭-‬ ‭Check.‬