COSO Internal Control Evaluation Tool_Sample

8/18/2019 COSO Internal Control Evaluation Tool_Sample

1/66


2/66


3/66


4/66


5/66


6/66


7/66


8/66


9/66


10/66


11/66


12/66


13/66


14/66


15/66


16/66


17/66


18/66


19/66


20/66


21/66


22/66


23/66


24/66


25/66


26/66


27/66


28/66


29/66


30/66


31/66


32/66


33/66


34/66


35/66


36/66


37/66


38/66


39/66


40/66


41/66


42/66


43/66


44/66


45/66


46/66


47/66


48/66


49/66


50/66


51/66

Actions/Contro" Acti(ities/Comments

Ot#erO%2ecti(es

A9ecte!

E(a"uationan!

Conc"usion

00. ;eceiving documents aresequentially prenumbered, andmissing documents areinvestigated weekly.

0(. Barehouse personnel will notaccept material without a copy ofappropriate receivingdocumentation. Materialremaining in the receivingdepartment for more than one day is investigated by a receivingsupervisor.

06. >endor invoices will not be processed unless matched with proper receiving documentation.

nmatched invoices areinvestigated promptly.

0H. ;eceiving reports are sub+ect toveri!cation by the receivingdepartment supervisor.

02. ;eceiving reports must bematched to a material transferdocument signed by theauthori3ed party who accepted thematerials from the receivingdepartment. nmatched receivingreports are investigated weekly.

$ontrols are su/cient to achievethe ob+ective.

0N. Material return forms are prenumbered, and missingdocuments are promptlyinvestigated.


/var/www/apps/conversion/tmp/scratch_5/314264406.doc 149


52/66

Ris0 Ana" sis

O%2ecti(es O&F&C

Ris0 Factors Li0e"i#oo!

Material return documentationmay not be prepared.

5ow

Material return documentationmay be inaccurate.

5ow

!ecei e

O. &nly material properly ordered areaccepted.

& %mployees may lack informationregarding properly orderedgoods.

5ow

C. &nly materials which comply with purchase order speci!cations areaccepted.

& Material received from vendorsmay not comply withspeci!cations.

Medium

150


53/66


Ot#erO%2ecti(es

A9ecte!

E(a"uationan!

Conc"usion

0O.


54/66

Ris0 Ana" sis

O%2ecti(es O&F&C



55/66


Ot#erO%2ecti(es

A9ecte!

E(a"uationan!

Conc"usion

((. ;eceiving is provided a copy ofthe contractor purchase order withspeci!cations clearly indicated.'peci!cations are matched tovendor documentation and testresults before material isforwarded to another department.

(6. Testing procedures are reviewedand updated annually by thedirector of procurement and theengineering manager. The

procedures are reviewed andapproved by the vice president operations.

(H. Testing equipment is checked andrecalibrated every 6) days, orupon the request of the equipment operator, whichever is morefrequent.

(2. Testing equipment is reviewedand recommendations for newequipment are made incon+unction with the review oftesting procedures noted incontrol Qi (6. pproval of newequipment is required of the >ice#resident &perations.

(N. Test documentation is reviewed by supervisory personnel. Materialsused to manufacture parts criticalto Aight safety are sub+ect torandom retesting. Discrepanciesnoted in retesting are investigatedand appropriate follow up action istaken 9retraining, termination ifhigh number of discrepancies arenoted and training fails to resolvethe problem, etc.:.

#roduction Q0)KGot shownL



56/66

Ris0 Ana" sis

O%2ecti(es O&F&C


I. %nsure that materials transferredfrom receiving to other activitiesare completely and accuratelyrecorded.

&," #roper documentation is not prepared.


57/66


Ot#erO%2ecti(es

A9ecte!

E(a"uationan!

Conc"usion

(O. #roduction personnel monitor problems related to materialsfailing to meet engineeringspeci!cations, and report suchresults to procurement andappropriate follow up action istaken.

(C. Material cannot be transferredwithout transfer documents.

F@. Transfer documents must besi#ned by both the receivin#employee and the employeeacceptin# the transfer. Bothemployees verify its completenessand accuracy.

>G. )nventory is counted quarterly. Thephysical count is compared "ithperpetual inventory records.1i*erences are investi#ated.


60. ;ecord keeping of precious metalis performed by an individualindependent of those employeesresponsible for handling andstorage of the metals.




58/66

Ris0 Ana" sis

O%2ecti(es O&F&C


00. #roperly transfer all materialsrequisitioned, and only suchmaterials.

&,"


59/66


Ot#erO%2ecti(es

A9ecte!

E(a"uationan!

Conc"usion

6(. The precious metals are stored ina locked and guarded location.'urveillance cameras continuously record all entrances and exits ofthe storage area.

66. ll packages, briefcases, etc.,;emoved from the facility byemployees are sub+ect toinspection by security personnel.

6H. #hysical counts of precious metalsare made monthly by individualswith no responsibility for recordkeeping or storage of the metals.The counts are reconciled with the

perpetual records, and di4erencesinvestigated.

62. 'tores personnel transfermaterials to operations only on theauthority of a properly approvedrequisition.

6N. -oth stores and operations personnel verify that propermaterials are transferred and bothsign transfer documentation.


6O. Transfer documentation is signedby both stores and operations

personnel, who verify its accuracy.

6C.


60/66

Ris0 Ana" sis

O%2ecti(es O&F&C


Transfer documents may be lost. Medium

06. 7a3ardous materials are handledand stored in compliance with&ccupational 'afety and 7ealth

dministration 9&'7 : and otherlaws and regulations.

$ %mployees may disregardha3ardous material handling andstorage policies and procedures.

5ow

'torage tanks may leak. Medium 7igh

15$


61/66


Ot#erO%2ecti(es

A9ecte!

E(a"uationan!

Conc"usion

6I. Transfer documents are prenumbered, with missingdocuments investigated weekly.

H). %mployees responsible forhandling and storing ha3ardousmaterials are closely supervised,and their work reviewed byexperienced supervisors.Deviations from speci!ed policy aretreated as serious matters, anddisciplinary actions is swift andsevere.

H0. %mployees responsible forhandling and storing ha3ardousmaterials are sub+ect to regulardrug testing.

H(. 'torage tanks are inspectedannually. ny sign of irregularity isimmediately investigated andresolved.

H6. 'torage tanks are replaced at I)*of the manufacturer?s estimateduseful life.

HH. Bater and soil samples, takenfrom near the storage tanks, aretested quarterly to detect leakage.

ny sign of irregularity isimmediately investigated andresolved.

$ontrols are adequate to achievethe ob+ective. 7owever,employees are not provided

periodic training on laws andregulations nor on handling andstorage techniques. This trainingcould provide assurance thatemployees remain knowledge ofsuch laws, regulations andtechniques. dditionally, it wouldhelp ensure that employeesremain aware of the importance of complying with company policies.



62/66

Ris0 Ana" sis

O%2ecti(es O&F&C


0H. "ederal and state &ccupational'afety and 7ealth dministration9&'7 : laws and regulations arecomplied with.

$ #ersonnel may not be familiarwith all &'7 requirements.

Medium

&'7 ;equirements may beviolated due to errors, neglect orintentional disregard.

Medium 7igh

160


63/66


Ot#erO%2ecti(es

A9ecte!

E(a"uationan!

Conc"usion

H2. Monitoring systems to measure pressure in pipelines used totransport ha3ardous materials areutili3ed to detect leaks or other

potential problems. These systemsare inspected quarterly. ny sign of irregularity is immediatelyinvestigated and resolved.

HN. 5egal counsel, and the >ice#resident &perations review

policy and procedure quarterly.'uch policy and procedures aremodi!ed as necessary to complywith &'7 requirement.

HO. 5egal counsel observes executionof company policies and

procedures on a regular basis.Puestionable acts are immediatelyinvestigated and appropriatefollow up action is taken.

HC. %mployees are encouraged toreport any suspected violations tothe o/ce of the $%&. %mployees ofthe o/ce of the $%& follow up onsuch communication.

$ontrols are su/cient to achievethe ob+ectives.



64/66


65/66

to changes are adequate. Beneed to continue to watch for

potential morale weaknessfrom former 5aker #artsemployees. $onsider havinghuman resources monitorattitudes and performance.

Contro" Acti(ities -- Arecontrol activities in place toensure adherence toestablished policy and thecarryin# out of actions toaddress the related risksH Arethere appropriate controlactivities for each of theentity s activitiesH

$ontrol ctivities have beendesigned and implemented toaddress signi!cant risksrelated to department and unit activity ob+ectives. $oncernsraised re materials testing andhandling ha3ardous materialsneed to be addressed.

ctivities for testing materialsfro determining whether toaccept or re+ect shipments.and procedures f or trainingoperations personnel on &'7requirements for disposal ofha3ardous waste, will bere!ned and formali3ed.

Information an!Communication -- Areinformation systems in place toidentify and capture pertinentinformation -- nancial andnon nancial, relatin# toe%ternal and internal events --and brin# it to personnel in aform that enables them tocarry out their responsibilitiesH1oes communication ofrelevant information takeplaceH )s it clear "ith respect toe%pectations andresponsibilities of individualsand #roups, and reportin# ofresultsH And doescommunication occur do"n,across and up"ard in theentity, as "ell as bet"een theentity and other partiesH


66/66

O(era"" Conc"usion

-$?s system of internal control, as of December 60, 0Ixx, is e4ective and provides reasonableassurance that the company?s !nancial reporting process is reliable, that the company hase4ective procedures for ensuring compliance with applicable laws and regulations, and thatmanagement is aware of the extent to which the company is moving toward achieving theoperations ob+ectives.

Documents

COSO Internal Control Evaluation Tool_Sample